fll 


By  Jltnos  Bidder  Fisfce 


The  West  Indies— A  History 

In    the  Story  of  the  Ration*  Scries 

Honest  Business 


Honest   Business 


Right   Conduct    for    Organisations   of 
Capital   and   of   Labour 


By 

Amos  Kidder  Fiske,  A.M. 

Author  of  "The  Modern  Bank,"   "The   West  Indies," 
"The  Great  Epic  of  Israel,"  etc. 


G.  P.  Putnam's  Sons 

New  York  and  London 

ZTbe    fmfcfterbocfcer    press 
1914 


COPYRIGHT.  1914 

BY 
AMOS    KIDDER    FISKE 


Cbc  ftnlckerbocfcer  prc»»,  Hew  Corfc 


LIBRARY 

UNIVERSITY  OF  CALIFORNIA 
SANTA  BARBARA 


PREFACE 

IN  the  chapters  that  follow,  the  writer  has 
undertaken  to  give  a  description  and 
explanation  of  the  essential  conditions  that 
are  the  basis  of  business  organisation  and  of 
the  principles  that  control  business  oper- 
ations. In  the  course  of  editorial  labours 
covering  a  long  series  of  years,  the  author 
has  had  constant  occasion  to  apply  to  current 
problems  methods  presumed  to  be  "  up-to- 
date"  and  principles  evolved  by  experience 
and  observation. 

It  is  his  belief  that  in  this  work  he  has 
acquired  views  on  various  aspects  of  the  rela- 
tion of  capital  and  labour,  of  production  and 
consumption,  of  wealth  and  poverty,  and  of 
the  rights  and  interests  of  the  people  individ- 
ually and  collectively,  which  vary  sufficiently 
from  opinions  largely  accepted  by  the  general 
public  to  warrant  their  being  brought  into 
print  for  the  purpose  of  furthering  the 
material,  the  mental,  and  the  moral  progress 
of  the  community.  The  chapters  will  be 

iii 


iv  Preface 

found  to  contain  some  repetition  of  certain 
fundamental  ideas  concerned  with  different 
aspects  of  the  same  general  problem.  Such 
repetition  is  not  in  itself,  at  least  for  the 
student,  a  disadvantage,  as  there  are  matters 
which  ought  to  be  kept  in  mind  with  the 
consideration  of  each  separate  subject  matter 
or  of  each  division  of  the  larger  subject.  The 
volume  has  been  planned  for  the  information 
and  enlightenment  of  the  common  mind,  that 
is  to  say  for  the  service  of  the  average  man 
and  particularly  of  the  younger  men  who 
are  willing  to  give  serious  thought  to  their 
increasing  responsibilities  as  citizens.  It  is 
the  author's  hope  that  his  book  may  stimu- 
late these  citizens  to  sound  thinking  on 
questions  which  concern  the  daily  life  of  all 
the  people  and  the  prosperity  and  the  safety 
of  the  Republic. 

A.  K.  F. 


NEW  YORK. 

July,  1914. 


CONTENTS 
I 

PAGE 

WHAT  Is  BUSINESS  ?      .         .         .         .        i 

II 

ALL  MEN  ARE  NOT  EQUAL  ...        9 

ill 
SELFISHNESS  AS  AN  ECONOMIC  PRINCIPLE       16 

IV 
UNREST  DUE  TO  UNFAIR  DIVISION         .       28 

v 
THE  USE  OF  MONEY  AND  CREDIT  .       36 

VI 
MEANING  OF  WAGES,  PROFITS,  AND  PRICES      57 

VII 

RIGHT  AND  WRONG   IN    FIXING    WAGES 

AND  PRICES    .....       69 

V 


vi  Contents 

VIII 

PACE 

SOCIALISM  NO  REMEDY  FOR  INEQUITY     .       85 

IX 
HONESTY  IN  LABOUR  UNIONISM     .        .      98 

X 
POWER  OF  ORGANISED  CAPITAL      .         .116 

XI 

REGULATION  OF  CAPITAL  AND  LABOUR   .     134 

XII 
CAN  GOVERNMENT  REGULATE  BUSINESS  ?     151 

XIII 

MAKING  GOVERNMENT  MORE  EFFICIENT     166 

XIV 

How   GOVERNMENT'S  OWN   BUSINESS  is 

DONE 177 

XV 
THE  DREADFUL  WASTE  OF  WAR    .         .     200 

XVI 
COST  OF  THE  DEFECTIVE  AND  USELESS    211 


Contents  vii 

XVII 

PAGE 

HONOURABLE  MAKING  AND  USE  OF  WEALTH    228 

XVIII 

HONOURABLE  CONDUCT  OF  LABOUR         .     242 

XIX 
EXTREMES  OF  POVERTY  AND  RICHES       .     261 

XX 

HONEST    DIVISION    OF    THE    FRUITS    OF 

LABOUR  .....     279 


•     293 
XXII 

COST  AND  VALUE  OF  LIVING          .         .     306 

XXIII 

THE  BEST  POLICY          ....     325 


Honest   Business 


WHAT  IS  BUSINESS? 

BUSINESS  is  busy-ness.  Every  one  who 
is  working  with  mind  or  with  muscle 
to  produce  from  the  natural  resources  of  the 
earth,  and  to  distribute  and  diffuse  the  things 
which  minister  to  the  manifold  wants  of 
mankind,  is  doing  his  part  in  the  business  of 
the  world.  Every  one  who  owns  or  supplies 
the  tools  and  implements,  the  appliances  and 
facilities,  for  these  processes,  or  who  takes 
part  in  directing  the  necessary  operations 
for  making  them  effective,  is  engaged  in 
business.  Capital  furnishes  the  things  to 
work  with,  to  multiply  products,  and  to 
expedite  their  distribution,  and  those  who 
supply  the  capital  perform  an  important 
service  in  carrying  on  business.  Labour  and 


2  Honest  Business 

capital  are  the  producers.  They  must  work 
together  or  no  large  amount  of  business  can 
be  done.  Capital,  which  is  the  offspring  of 
labour  and  would  not  exist  without  it,  could 
do  nothing  alone  for  its  owner.  Labour  could 
work  for  itself,  provided  it  had  possession  of 
the  earth,  but  it  would  make  but  a  primitive 
and  precarious  living  until  it  had  created  and 
accumulated  capital  as  a  means  of  multiply- 
ing results. 

For  men  to  be  busy  and  to  attain  the 
results  of  business,  they  must  have  capital 
and  they  must  work  together  in  using  it. 
The  more  effectively  and  faithfully  they  work 
together,  the  more  they  will  produce  and 
divide  among  themselves,  and  the  better  it 
will  be  adapted  to  satisfy  their  wants.  The 
more  business  will  prosper  and  the  better  off 
will  all  be  who  take  part  in  it.  We  use  labour 
and  capital  here  in  a  figurative  sense,  to 
denote  those  who  do  the  work  and  those  who 
own  and  furnish  the  capital,  which  is  the 
product  of  work  already  done  and  the 
progenitor  of  more  work  and  of  new  capital. 
Labour  and  capital  in  this  sense  are  natural 
partners.  They  cannot  be  rivals,  because 
each  is  indispensable  to  the  other,  and  for 
them  to  be  enemies  is  folly.  For  them  to 


WHat  Is  Business?  3 

resist  and  fight  each  other  wastes  time  and 
energy,  diminishes  production,  and  causes 
nothing  but  loss  to  one  side  or  the  other,  and 
in  the  long  run  to  both. 

Labour  and  capital,  or  workers  and  owners 
of  capital,  are  partners  in  business,  but  their 
shares  as  such  vary  in  different  occupations. 
In  cultivating  the  soil  and  delving  in  the 
earth  labour  may  have  a  predominating 
part,  but  to  accomplish  much  it  has  to  work 
with  capital,  and  the  more  it  works  with  it, 
the  more  it  will  produce.  In  manufacturing, 
capital  takes  a  larger  part  because  costly 
buildings  and  machinery  must  be  supplied, 
without  which  labour  would  be  compara- 
tively helpless.  In  transportation  and  trade 
capital  takes  a  still  larger  share  in  accom- 
plishing results,  for  the  partners  are  engaged 
in  carrying,  distributing,  and  exchanging 
what  others  have  made  and  are  sending  to 
market.  They  are  performing  an  important 
function  in  business,  one  without  which  it 
could  not  get  along  very  far.  In  banking, 
capital  is  pretty  nearly  the  whole  thing. 
Handling  capital,  "raising"  it,  placing  it 
where  it  is  wanted,  and  getting  it  into  use,  is 
its  part  of  business  and  an  essential  part 
where  business  is  done  on  a  large  scale. 


4  Honest  Business 

Without  it  business  on  a  large  scale  would 
not  be  possible.  But  everywhere  there  must 
be  labour.  Without  it  capital  would  be 
inert  and  useless. 

But  what  is  labour?  What  is  work?  It  is 
not  merely  toil  with  the  hands  or  with  tools  or 
machinery.  Even  that  requires  intelligence, 
and  the  more  intelligently  it  is  performed, 
the  more  fruitful  it  will  be  and  the  more 
valuable  in  business.  But  labour  with  the 
brain,  with  the  mind,  in  which  the  hand 
has  a  subordinate  and  often  an  insignificant 
part,  is  quite  essential  to  any  but  the  most 
meagre  results.  It  is  absolutely  necessary  to 
any  large  results,  and  the  greater  its  power 
the  richer  those  results.  As  tools  and 
machinery  multiply  the  product  of  manual 
effort,  mental  effort  applied  to  planning, 
directing,  and  executing  in  business,  in- 
creases according  to  its  capacity  and  skill 
the  output  of  both.  This,  too,  is  labour. 
This  is  work  of  the  most  effective  kind. 
Brain  handles  capital  as  brawn  handles  tools, 
to  multiply  product  and  conduce  to  abund- 
ance. They  must  work  together  to  make  the 
best  business. 

Why  do  they  not  always  work  in  harmony, 
seeing  that  it  is  manifestly  for  their  interest 


\VKat  Is  Business?  5 

to  do  so,  since  more  would  be  produced  for 
all  to  share?  Simply  because  labour  and 
capital  in  the  figurative  sense  in  which  we 
use  the  terms  are  human,  and  humanity  is 
on  the  whole  neither  wise  nor  entirely  honest 
with  itself.  Those  whose  work  is  chiefly 
of  the  mind,  exercised  in  planning,  directing, 
and  executing  the  processes  and  operations 
of  business,  must  control  the  capital  in  use. 
If  they  do  not  own  it  they  represent  those 
who  do,  and  are  employed  to  work  for  them. 
At  every  stage  of  the  process  of  production, 
which  means  the  process  of  getting  what 
nature  supplies  from  the  place  and  form  in 
which  it  is  found  to  that  in  which  it  is  to  be 
used  to  satisfy  human  wants,  every  one 
engaged  in  the  business  is  entitled  to  his 
share  in  the  fruits  of  labour,  in  proportion 
to  the  part  which  he  has  contributed  to  their 
production. 

That  may  be  difficult  to  determine,  but 
not  so  difficult  as  it  is  to  accomplish.  If 
every  one  were  anxious  to  ascertain  simply 
what  fairly  and  rightly  belongs  to  him,  and 
were  willing  to  accept  that  and  no  more,  the 
difficulty  would  be  greatly  diminished;  but 
the  fact  is  that  nearly  every  one  is  eager  to 
get  all  he  can,  and  willing  to  receive  it  whether 


6  Honest  Business 

it  rightly  belongs  to  him  or  not.  It  is  from 
this  weakness  of  human  nature  that  nearly 
all  the  trouble  in  business,  between  labour  and 
capital,  between  employers  and  employed, 
between  rivals  in  trade,  between  corporations 
or  combinations  and  the  public,  proceeds. 
Men  are  not  sufficiently  honest  with  each 
other  or  with  themselves  in  the  business  of 
life,  and  they  are  continually  suffering  the 
penalty. 

The  great  need  of  the  time  is  to  get  ethics 
into  economics  and  morals  into  business. 
The  human  race  has  been  striving  for  ages  to 
attain  a  higher  standard  of  conduct  in  the 
different  relations  of  life,  which  means  a 
better  chance  of  happiness  and  content  of 
spirit.  The  effort  has  been  directed  mainly 
to  social  and  domestic  relations  to  the  neglect 
of  economic  and  business  relations.  People 
have  become  "indifferent  honest"  in  their 
smaller  dealings  and  their  personal  relations, 
where  they  come  into  immediate  contact 
with  each  other.  Mere  lying  and  cheating, 
even  getting  the  better  of  each  other  in 
trade,  has  fallen  into  general  disrepute 
because  it  comes  so  closely  home  to  the 
individual  and  is  so  palpable.  But  business 
with  a  big  "B,"  in  which  transactions  are 


"WHat  Is  Business?  7 

on  a  large  scale  and  widely  extended,  has 
been  too  much  regarded  as  a  game  where 
skill  and  finesse  may  be  used  without 
scruple,  or  as  a  kind  of  warfare  in  which 
strength  and  strategy  must  prevail  to  the 
discomfiture  of  those  who  are  unable  to  hold 
their  own  in  the  struggle. 

Men  have  been  wont  to  use  their  "inside 
knowledge,"  however  attained,  all  their  re- 
sources, their  keenness  and  subtlety,  and  their 
advantage  of  position,  however  adventitious, 
without  scruple,  because  "business  is  busi- 
ness" and  everybody  is  expected  to  be  "  on  the 
make"  and  to  make  all  he  can  without  con- 
sidering who  loses.  This  has  not  been  consid- 
ered inconsistent  with  "good  standing"  in 
society,  especially  if  the  gains  are  disposed  of 
in  a  reputable  way.  Much  less  has  it  been 
destructive  of  "good  standing  in  the  business 
world."  This  lack  of  a  strict  moral  and 
social  judgment  in  business  matters  has 
resulted  in  such  excesses  and  abuses  as  at 
last  to  cause  a  revolt  and  bring  "big  business " 
into  disfavour.  Its  offence  has  been  ac- 
counted "rank"  in  comparison  with  that  of 
small  business  because  it  is  conspicuous  and 
unconcealed.  This  it  is  that  has  led  to  so 
much  agitation  for  regulation  and  super- 


8  Honest  Business 

vision  by  the  government  in  behalf  of  the 
people.  But  the  one  thing  most  needed  in 
solving  the  problems  of  labour  and  capital 
and  the  relations  of  business  to  the  general 
well-being  is  simple  honesty  in  the  dealings 
of  men  with  each  other  and  with  the  public. 
If  all  would  stand  only  for  what  are  their 
rights  there  would  be  no  wrongs  for  govern- 
ment to  correct  or  to  punish. 


ALL  MEN  ARE  NOT  EQUAL 

WHEN  we  speak  of  the  part  which 
labour  and  capital  take  in  the  busi- 
ness of  the  world,  or  the  part  which  those 
who  own  or  supply  capital  and  those  who 
work  with  their  hands  or  with  their  brains 
contribute  to  production  and  are  entitled 
to  share  in  its  results,  we  must  recognise 
the  great  differences  which  exist  among 
people,  differences  in  the  part  they  take  in 
the  work  done  and  consequently  differences 
in  the  shares  of  the  fruits  of  labour  to  which 
they  are  entitled.  It  is  no  more  honest 
for  one  to  insist  upon  having  more  than  he 
has  earned  than  it  is  for  another  to  seek  to 
prevent  him  from  getting  all  that  he  has 
earned.  If  in  one  case  there  is  a  union  of 
forces  to  compel  an  unfair  division,  or  in 
another  case  to  withhold  a  fair  division,  it  is 
alike  extortion  or  fraud.  It  is  robbery  of 
some  for  the  gain  of  others.  It  is  rank 
9 


IO  Honest  Business 

injustice.  In  plain  terms  it  is  dishonest, 
and  in  the  end  honesty  is  best  merely  as  a 
matter  of  policy.  The  sure  result  of  the 
effort  of  one  partner  to  get  the  better  of  the 
other  is  a  conflict  which  causes  a  diminu- 
tion of  the  supply  of  goods  to  be  distributed, 
a  reduction  of  national  wealth,  and  an  im- 
pairment of  the  general  welfare.  While  some 
may  for  a  time  get  more  from  unjust  methods 
at  the  expense  of  others  than  they  would  by 
fair  dealing,  nobody  can  escape  his  share  in 
the  final  penalties. 

Whether  or  not  it  is  a  self-evident  truth, 
it  is  a  fact  proved  by  observation  and  ex- 
perience, that  all  men  are  not  created  equal, 
if  what  is  meant  is  equality  of  capacity  for 
the  struggle  of  life  or  equality  in  the  elements 
that  are  to  form  character  and  contribute 
to  success.  There  is  no  fact  more  funda- 
mental, in  considering  the  problems  of  human 
life,  than  the  inequality  of  men.  Nor  are 
all  men  or  any  man  endowed  by  their  creator 
with  rights  which  may  not  be  alienated  or 
forfeited,  even  to  life,  liberty,  and  the  pur- 
suit of  happiness.  But  what  all  men  are 
justly  entitled  to  is  an  equal  chance  in  life 
for  the  employment  of  such  faculties  as  they 
possess,  for  their  development  and  improve- 


Ail  Men  Are  Not  Equal          1 1 

ment ,  and  for  securing  the  fruits  of  their  own 
efforts.  Their  very  inequality  and  the  condi- 
tions which  inevitably  result  impose  upon  the 
strong,  the  richly  endowed,  and  the  favoured 
by  circumstances,  the  responsibility  of  giving 
to  the  weaker  and  the  less  fortunate  that  fair 
chance  in  the  world  which  of  right  belongs 
to  every  man  born  into  it.  More  than  that, 
it  is  the  moral  duty  of  the  strong  and  the 
favoured  to  lend  a  hand  to  the  weaker 
brethren  of  the  race  and  help  them  to  rise 
and  to  advance  with  the  rest,  according  to 
the  measure  of  their  capacity  and  willing- 
ness. It  is  not  only  a  moral  duty  to  human- 
ity, but  an  economic  duty  to  organised 
society,  in  the  benefit  of  which  all  must 
share. 

It  is  a  patent  truth,  if  not  self-evident, 
that  in  the  creation  or  evolution  of  man, 
throughout  history  and  in  the  present 
state,  vast  and  varied  differences  have  devel- 
oped. Every  ' '  common  labourer ' '  knows  that 
in  his  calling  there  are  differences  in  physi- 
cal strength,  activity,  and  endurance.  There 
are  differences  in  industry,  in  the  disposition 
as  well  as  the  capacity  to  work,  and  in  the 
incentives  and  motives  for  effort.  It  is  not 
wholly,  or  in  any  considerable  part,  a  matter 


12  Honest  Business 

of  volition,  but  of  innate  qualities  and  of 
habit  springing  from  them.  Every  skilled 
workman  is  well  aware  that  there  are  wide 
differences  in  intelligence,  in  capacity  for 
training,  and  ability  for  acquiring  skill,  and 
consequently  in  the  results  attained.  There 
is  here  as  elsewhere  great  inequality  in 
industry,  in  ambition,  in  willingness  to  work 
steadily,  in  thrift,  and  in  the  desire  to  better 
one's  condition. 

Among  those  whose  capacity  and  disposi- 
tion are  for  work  with  mind  rather  than  with 
muscle,  to  do  the  thinking,  planning,  and 
directing  in  the  activities  by  which  men 
live,  there  are  similar  differences.  They 
affect  the  innate  ability  of  men  so  endowed 
for  the  service  to  which  they  aspire,  their 
aptitude  for  the  needed  training,  their 
application  and  persistency  in  meeting  its 
requirements;  and,  as  an  inevitable  conse- 
quence, there  is  every  degree  of  success  and 
failure.  This  is  as  true  of  business  men, 
of  exploiters  of  production,  of  managers 
of  manufacturing  industry,  of  directors  of 
transportation  and  of  traders  and  agents 
of  exchange,  as  of  professional  men  whose 
function  it  is  to  give  legal  or  medical  advice 
and  service  or  those  who  are  devoted  to  the 


All  Men  Are  Not  Equal          13 

embellishment  or  the  diversions  of  life. 
Those  who  start  upon  these  various  paths, 
which  may  or  may  not  lead  to  wealth  or 
eminence,  have  diversity  of  faculties,  quali- 
ties, and  aptitudes  for  what  they  undertake, 
which  lead  to  equal  diversity  of  results,  and 
the  way  is  strewn  with  disappointments 
and  failures,  while  comparatively  few  reach 
the  heights  of  success.  The  greater  number 
merely  live,  in  more  or  less  comfort. 

It  is  not  alone  in  the  elements  of  efficiency 
for  the  world's  work  that  men  are  created 
unequal.     Personal    qualities    develop    with 
their   growth    which    variously   affect    their 
fortunes.     Some  have  attractive  traits  which 
are   the   gift   of  birth   and   inheritance  and 
which  help  them  to  find  opportunity  and  to 
hold  to  it.     Others  are  always  ready  to  help 
them  along  rather  than  to  hinder  them  or  to 
take  advantage  of  them.     Some  lack  these  "7 
gifts  and  some  are  afflicted  with  repellent   • 
traits  which  hamper  their  efforts-,  however  • 
meritorious  from  the  point  of  view  of  ef-^ 
ficiency  and  fidelity.     These  differences  are 
mainly  a  matter  of  natural  endowment  and 
not  of    the  will  of  those  who  are  blest  or 
cursed  with  them. 

There   are   differences   of   condition    and 


14  Honest  "Business 

environment  in  which  men  are  born  and 
spend  their  early  years  which  have  decisive 
results  in  their  lives,  independently  of  their 
native  faculties  and  capacities.  Some  owe 
everything  and  many  owe  much  to  favouring 
circumstances  supplied  by  the  efforts  of 
others,  and  many,  from  one  defect  and 
another,  fail  to  benefit  by  the  advantages 
of  birth,  surroundings,  and  every  helpful 
influence.  On  the  other  hand,  many  with 
the  germs  of  good  quality  and  fine  capacity 
are  so  submerged  and  overwhelmed  in 
adverse  conditions  at  the  beginning  of  life 
that  they  never  accomplish  that  of  which 
they  are  capable.  Only  a  few  among 
them,  with  exceptional  endowment  and 
strong  ambition,  by  hard  struggle  make 
their  way  to  success  among  the  foremost. 

There  are  moral  differences  upon  which 
we  need  not  dwell  here,  differences  in  a  sense 
of  honour  and  fidelity,  in  capacity  for  in- 
tegrity of  character  and  conduct,  and  these 
differences  have  much  to  do  with  the  economy 
of  human  society  as  well  as  its  attractiveness 
and  the  satisfaction  of  its  members.  This 
inequality  of  men  is  a  fundamental  fact  of 
economics.  It  is  to  be  taken  into  account 
at  every  step  for  its  bearing  upon  their 


All  Men  Are  Not  Equal  15 

rights  and  their  duties  and  obligations  as 
members  of  an  industrial  and  commercial, 
as  well  as  social,  organisation,  the  purpose  of 
which  is  or  should  be  the  welfare  of  the  whole 
people  more  than  for  the  concrete  wealth 
of  the  nation  as  an  organised  body  politic. 


Ill 

SELFISHNESS  AS  AN  ECONOMIC   PRINCIPLE 

WHILE  men  are  so  variously  endowed 
from  birth  and  develop  with  such  a 
diversity  of  faculties  and  qualities,  they  have 
one  controlling  motive,  which  also  has  its 
degrees  and  variations.  They  are  naturally 
selfish.  Selfishness  is  not  only  natural,  but 
it  is  useful  and  necessary  as  a  motive  power. 
It  is  the  father  of  emulation  with  its  thousand 
sons.  It  supplies  the  spur  to  effort  and  the 
stimulus  to  ambition.  It  emanates  from  the 
desire  to  live,  and  to  live  in  ease  and  comfort, 
and,  as  life  advances,  to  enjoy  its  various 
satisfactions.  It  is  associated  with  the 
powerful  instinct  implanted  in  man  for  the 
perpetuation  as  well  as  the  preservation  of 
life  in  the  process  of  evolution,  which  in 
the  human  race  creates  the  family  and  the 
social  organism  for  the  development  of 
the  higher  sentiments  and  loftier  purposes, 
which  distinguish  man  from  the  beasts  that 

16 


Selfishness  17 

perish.  Without  it  there  would  be  no 
progress. 

The  scientific  doctrine  of  evolution  in  the 
creation  of  the  world  and  its  inhabitants  is 
based  upon  indubitable  evidence  in  the 
earth's  history;  but  its  limits  are  not  clearly 
defined  and  it  may  be  too  rigidly  applied 
in  its  relation  to  the  development  of  human 
society.  In  the  conflict  of  force  and  matter 
there  is  a  never-ending  process  of  destruction 
and  re-creation;  and,  when  life  began,  there 
was  continual  strife  for  the  survival  of  the 
fittest,  that  progress  might  be  made  toward 
the  ultimate  goal.  Behind  this  secular 
process  there  must  have  been  an  infinite 
power  which  initiated  and  impelled  it.  It 
could  not  originate  from  nothing.  It  was 
not  the  march  of  dead  matter  and  blind 
force  engaged  in  a  fierce  struggle  without 
purpose  and  reaching  fortuitous  results. 
There  surely  came  a  time  when  man  emerged 
from  the  conflict  of  elements  and  derived 
from  some  source  in  the  midst  of  the  physical 
ferment  that  which  developed  into  mental 
powers  and  moral  qualities,  and  pointed  to 
some  other  destiny  than  hopeless  extinction. 

Something  in  some  way  and  for  some  pur- 
pose endowed  men  with  reason,  conscience, 


l8  Honest  Business 

and  will.  Whatever  the  source  of  these 
qualities,  that  source  could  not  itself  have 
been  devoid  of  them  when  they  appeared  as 
germs  in  man  and  began  to  grow  to  what 
they  have  become.  Certainly  they  now 
exist  in  man  and  are  to  be  reckoned  as  his 
highest  endowment.  The  moral  qualities  are 
not  to  be  regarded  as  of  no  use  or  value  in 
man's  material  progress  and  economic  wel- 
fare, and  as  serving  only  to  save  his  soul  for 
another  life.  They  are  essential  to  the  real 
success  and  enjoyment  of  this  life.  They  are 
to  be  recognised  as  a  potent  force  for  bene- 
ficial results.  Their  neglect  entails  penalties 
from  which  there  is  no  escape.  Their  force 
does  not  destroy  the  selfish  instinct  but 
transforms  it. 

It  has  been  common  to  assume  in  economic 
discussion  that  every  man  is  entitled  to 
obtain  from  the  resources  of  nature  all  that 
he  can  wrest  from  them  by  his  own  efforts 
and  by  directing  the  efforts  of  others;  that 
the  capable  and  strong  are  entitled  to  all 
they  can  win  by  their  superior  capacity  or 
special  advantage  in  natural  endowment  or 
in  favourable  situation,  and  the  less  com- 
petent and  the  weak  must  be  content  with 
what  they  can  seize  or  pick  up  from  the 


Selfishness  19 

remnant;  that  the  former  have  no  responsi- 
bility on  account  of  the  latter  as  a  matter 
of  economic  principle  or  natural  right.  In 
the  production  and  apportionment  of  that 
whereby  men  live  there  has  been  a  virtual 
justification  of  the  Rob  Roy  doctrine; 
derived  from  the  creatures  of  flood  and 
field  "and  those  that  travel  on  the  wind." 

"The  good  old  rule 
Sufficeth  them — the  simple  plan, 
That  they  should  take  who  have  the  power, 
And  they  should  keep  who  can." 

The  human  race  has  inherited  the  earth 
and  the  fulness  thereof,  the  land  and  its 
resources,  with  the  varied  advantages  of 
location,  quality,  and  climate  over  the  face 
of  the  globe.  It  is  a  common  heritage  which 
cannot  be  increased  or  diminished  in  extent 
or  kind  by  any  effort  of  man,  but  which  may 
be  turned  to  account  for  his  sustenance  and 
enjoyment  only  by  such  effort.  The  first 
achievement  of  the  strong  in  mind  and  body, 
the  most  capable  for  providing  for  self,  was 
to  take  possession  of  portions  of  land  and  its 
resources  to  hold  as  their  own  to  the  exclusion 
of  all  others.  In  the  progress  of  civilisa- 
tion the  right  to  hold  this  "property,"  by 


2O  Honest  Business 

whatever  means  the  "title"  may  originally 
have  been  obtained,  has  been  confirmed, 
established,  and  protected  by  law.  The 
holders,  whether  by  seizure  when  there  were 
no  prior  possessors,  by  inheritance,  or  by 
purchase,  have  been  secured  in  permanent 
and  exclusive  ownership.  They  have  been 
treated  as  not  only  entitled  to  have  and  to 
hold  all  that  they  could  derive  from  it  by  the 
labour  of  themselves  and  others,  and  what- 
ever increased  value  may  accrue  to  the  land 
from  their  efforts,  but  also  all  the  increment 
that  may  come  from  the  growth  of  communi- 
ties and  the  development  of  industry  and 
trade  due  to  the  efforts  of  others.  This  is 
one  great  cause  of  inequality  in  the  distribu- 
tion of  wealth  and  in  the  condition  of  people 
of  like  capacity  and  merit. 

Another  is  the  advantage  taken  by  the 
strong  over  the  weak  in  the  employment  of 
labour.  In  primitive  conditions  it  was  the 
natural  result  of  differences  in  physical 
strength,  in  mental  force,  in  skill,  and  energy, 
that  some  should  acquire  more  than  others. 
They  could,  if  they  would,  live  more  sump- 
tuously or  live  in  greater  case,  or  they  could 
accumulate  part  of  what  they  produced  or 
acquired  and  grow  rich.  Thereby  the}'  could 


SelfisKness  21 

arrogate  to  themselves  more  and  more  the 
sources  of  wealth  and  use  them  for  their 
further  enrichment.  This  could  be  done 
without  actual  encroachment  upon  the  rights 
of  others  or  seizure  by  superior  strength  of 
what  others  had  gained.  Thus  inequality 
of  condition  would  be  speedily  established, 
and  would  grow  with  the  keeping  of  wealth 
in  families  by  inheritance,  so  long  as  the 
capacity  for  getting  and  keeping  was  per- 
petuated. Even  after  that,  the  law  put 
safeguards  around  accumulated  property  to 
prevent  it  from  being  diffused. 

As  the  possession  of  land  and  its  natural 
resources  and  the  accumulation  of  wealth 
advanced,  it  became  necessary  for  owners  to 
use  more  labour  than  their  own  or  that  under 
their  immediate  control  in  family  or  clan. 
Labour  had  to  be  owned  or  had  to  be  hired 
and  paid  for  with  subsistence  sufficient  to 
secure  it.  In  the  early  stages  of  progress 
the  less  competent  of  men  were  generally 
averse  to  more  labour  than  was  necessary 
to  sustain  their  own  lives  or  minister  to  their 
most  urgent  wants.  They  were  averse  to 
steady  or  systematic  effort  and  unwilling  to 
work  unless  they  were  compelled  to  it.  They 
were  especially  averse  to  working  for  the 


22  Honest  Business 

benefit  of  others  and  would  do  so  only  under 
compulsion,  either  of  force  or  distress. 
Hence  the  system  of  involuntary  servitude, 
of  slavery,  serfdom,  and  feudal  dependence, 
whereby  the  many  of  inferior  capacity 
laboured  for  the  few  who  had  greater 
capacity  or  had  acquired  advantages  which 
gave  them  mastery. 

This  system  was  at  that  stage  necessary 
to  the  continued  growth  of  wealth  and 
the  advance  of  industry  in  producing 
from  the  resources  of  nature  and  distri- 
buting among  men  those  things  which 
sustained  life  with  increasing  comfort  and 
order.  While  it  contributed  to  a  still  greater 
diversity  of  condition,  a  wider  difference 
between  those  who  had  much  and  those  who 
had  little  or  nothing,  the  condition  of  slaves 
and  dependents  was  doubtless  better  than 
the  condition  of  the  sunn-  jK-rsnns  would 
have  been  if  they  were  left  to  such  fate  as 
they  might  make  for  themselves.  This  was 
a  stage  in  progress  which  was  necessary  to 
prepare  the  way  for  the  next  and  contribute 
to  material  advancement  and  elevation.  It 
had  to  be  outgrown. 

Next  came  the  stage  of  some  employing 
the  labour  of  others  by  hiring,  or  "the  wages 


SelfisKness  23 

system,"  which  led  on  to  the  modern  division 
of  labour,  the  multiplication  of  machinery, 
the  organisation  of  capital,  and  all  the 
rest,  which  have  created  so  many  problems 
and  so  much  conflict  over  their  solution. 
Under  the  wages  system  the  inequality  of 
men,  and  the  advantage  of  the  strong  over 
the  weak,  or  the  superior  in  capacity  over 
the  inferior,  is  no  less  conspicuous  than  in 
other  aspects  of  human  life.  It  is  the 
fundamental  fact,  the  self-evident  truth. 
Here,  too,  is  where  the  failure  of  economic 
science  to  take  cognisance  of  its  most 
important  principle  is  especially  glaring. 

Of  the  value  of  emulation  among  met 
there  is  no  question.  The  desire  to  better 
one's  condition,  to  improve  one's  position, 
to  excel,  to  win,  to  accumulate  wealth,  is 
the  mainspring  of  material  progress,  and 
material  progress  is  essential  to  advancement 
and  elevation  in  individual,  social,  and  politi- 
cal life.  In  the  language  of  economics  this 
takes  form  in  the  "principle"  of  competition. 
Competition  is  a  word  that  gives  expression 
to  an  important  principle;  but,  like  many 
others,  it  is  susceptible  of  various  meanings 
and  applications.  Competition  has  been 
sanctified  into  a  sort  of  fixed  dogma,  infallible 


24  Honest  Business 

in  its  working  and  indisputable  in  its  valid- 
ity; and,  like  some  other  dogmas,  it  has  lost 
vitality  by  putting  theory,  or  doctrine,  above 
practical  effects.  It  has  been  treated  as  if 
human  beings  worked  in  an  industry  like 
machines,  subject  only  to  physical  laws  and 
external  control.  It  is  made  mechanical 
in  its  operation,  void  of  ethical  quality,  and 
having  no  relation  to  moral  conduct  or  a 
spiritual  side  in  man. 

Competition  among  men,  between  those 
of  varying  capacity,  has  been  likened  to 
that  struggle  in  the  evolution  of  nature 
which  results  in  the  survival  of  the  fittest 
and  the  destruction  of  the  unfit,  making  man 
only  the  last  product  of  a  physical  process 
with  no  destiny  but  final  annihilation  when 
the  world  is  ripe  and  ready  for  decay.  The 
strong,  the  richly  endowed,  the  favoured  by 
circumstances  and  by  the  civilisation  which 
they  have  made,  having  large  possession  of 
wealth,  become  capitalists,  masters  of  indus- 
try, and  magnates  of  trade.  They  gain  con- 
trol of  land,  of  "plants"  for  production,  of 
machinery  and  tools,  and  become  employers 
of  labour.  They  toil  and  spin  with  brains 
and  nerves  and  expend  their  energies  in 
work  as  exhausting  as  any,  and  they  are 


SelfisHness  25 

worthy  of  their  hire.  But  their  efforts  for 
more  wealth  would  be  unavailing  and  their 
own  work  would  be  fruitless  without  the 
labour  which  they  buy  and  pay  for  in  wages. 
How  have  the  learned  economists 
treated  the  "questions"  of  capital  and 
labour,  the  fundamental  questions  of  their 
"science"?  Mostly  as  a  soulless  matter  of 
competition,  of  the  survival  of  the  fittest 
in  a  struggle  for  life,  and  the  treading  down 
of  generations  of  men,  women,  and  children 
to  grind  out  wealth  to  be  gathered  by  the 
strong  as  a  means  of  increasing  their  power. 
From  a  merely  economic  point  of  view,  laws 
and  government  are  necessary  to  protect 
property  from  being  stolen  or  destroyed,  to 
protect  persons  who  do  the  work  of  creating 
wealth  from  being  killed  or  injured,  to 
protect  the  liberty  of  individuals  so  far  as 
that  contributes  to  the  welfare  of  society. 
The  chief  purpose  of  laws  and  their  enforce- 
ment by  an  established  authority  is  mate- 
rial and  not  moral  benefit.  Hence  certain 
wrongs  are  made  crimes  or  offences  against 
law,  to  be  punished  for  the  safety  of  the 
community.  It  is  mainly  a  question  of  pro- 
ducing and  conserving,  a  question  of  income 
and  its  security,  or  of  loss  and  expense. 


26  Honest  Business 

These  legal  wrongs  are  recognised  by  the 
"science  of  economics";  but  violations  of 
the  moral  law  which  prescribes  duties  and 
responsibilities  among  men  and  makes  of 
them  a  brotherhood,  bound  together  by  a 
common  origin,  a  common  relation  to  a 
supreme  power  and  a  common  destiny,  are 
treated  as  having  no  relation  to  the  intensely 
practical  matter  of  "making  a  living"  or 
"making  money."  That  is  a  struggle  with 
the  "best  man"  entitled  to  win,  every  man 
for  himself,  the  incapable  to  be  trampled 
upon,  the  hindmost  the  legitimate  prey  of  the 
evil  one.  There  is  a  "science"  of  ethics, 
but  it  is  not  a  relative  of  economics.  There 
is  charity,  but  it  is  outside  of  "business." 
There  is  religion,  but  it  has  an  exclusive 
field,  and  treats  souls  as  having  a  destiny 
apart  from  the  flesh  which  they  inhabit  and 
from  the  needs  of  the  present  life. 

But  after  its  long  experience  of  struggle 
with  selfishness  unrestrained  in  the  business 
of  life,  the  human  race  is  beginning  to  learn 
that  this  is  not  the  best  policy.  While  the 
members  of  that  race  in  their  several  com- 
munities have  great  diversities  of  capacity 
and  quality,  there  are  no  distinct  lines  of 
natural  division.  They  form  a  common 


SelfisHness  27 

working  mass  with  a  common  destiny,  and 
are  not  ranged  by  nature  or  by  fate  into 
ranks  and  classes  with  conflicting  interests. 
They  must  rise  or  fall,  advance  or  retreat, 
improve  or  degenerate,  as  one  body,  with  a 
general  consciousness,  a  common  soul,  as  it 
were.  The  leaven  of  that  mass  must  be  a 
sound  sense  of  justice,  the  savour  of  right- 
eousness,— what  a  notable  teacher  of  man- 
kind was  wont  to  call  the  "kingdom,"  or 
ruling  power,  "of  heaven."  In  business 
relations,  this  is  to  be  translated  as  plain 
honesty,  honesty  in  the  relations  of  workmen 
with  each  other,  in  the  dealings  of  capitalists 
with  each  other,  and  in  all  the  relations  of 
capital  and  labour.  Once  this  can  be  at- 
tained, the  troubles,  disputes,  and  conflicts 
will  disappear,  production  will  be  greatly 
enhanced,  the  common  wealth  will  be  in- 
creased, the  general  welfare  will  be  propor- 
tionately advanced. 


IV 

UNREST  DUE  TO  UNFAIR  DIVISION 

IN  primitive  times,  and  in  most  lands  in  the 
times  we  call  ancient,  the  strong  ruled, 
the  many  toiled  that  the  few  might  have 
power  and  wealth.  Thousands  worked  for 
a  miserable  subsistence,  because  they  could 
not  escape,  in  order  that  scores  might  live 
in  luxury,  win  predatory  battles,  and  build 
monuments  to  their  own  glory.  In  modern 
times  labour  has  been  made  vastly  more 
productive  and  its  fruits  have  been  more 
widely  and  more  plentifully  distributed, 
but  in  their  distribution  the  era  of  equity 
seems  to  be  still  remote.  The  increasing 
unrest  of  recent  years  comes  from  a  sense  of 
injustice  in  the  diffusion  of  the  proceeds  of 
labour.  In  labour  we  include  not  merely 
manual  and  mechanical  work,  the  toil  of 
muscle  and  the  strength  and  skill  that  direct 
it,  but  the  service  of  planning,  initiating, 
and  managing,  which  multiplies  the  effect 
28 


Unrest  Dxie  to  Unfair  Division    29 

of  labour, — the  toil  of  brain  and  the  ability 
that  directs  activity  to  fruitful  results. 

It  is  almost  a  fixed  practice  to  classify 
men  and  arrange  them  on  lines  of  difference 
in  capacity,  crediting  some  with  physical 
strength  and  a  quality  which  they  call  skill, 
or  capacity  for  skill,  and  others  with  mental 
force  and  what  they  call  "ability."  But 
nature  fixes  no  such  lines  of  division  into 
classes.  There  is  every  gradation  of  physi- 
cal and  mental  strength.  There  is  brain  in 
manual  and  mechanical  labour  in  varying 
degrees,  and  there  is  difference  only  in  degree 
between  the  ability  that  shows  itself  in  "skill " 
and  that  which  is  displayed  in  the  control 
of  capital  and  the  management  of  industries. 
There  would  often  be  gain  by  a  shifting  in 
the  ranks  to  put  ability  where  it  belongs  and 
incapacity  in  the  right  place. 

The  increase  in  the  power  of  production  in 
modern  times  has  come  chiefly  from  the 
division  of  labour,  the  invention  of  what 
are  called  "labour-saving"  devices,  and  the 
accumulation  of  capital  to  control  and  direct 
a  multiplicity  of  industrial  forces  working  to- 
gether. The  division  of  labour  so  that  each 
worker  may  be  employed  upon  a  single  process 
or  a  single  detail,  and  its  effect  in  multiplying 


30  Honest  Business 

results,  is  a  familiar  subject.  The  adoption 
of  labour-saving  devices  is  scarcely  less  so. 
These  are  not  strictly  devices  for  saving 
labour,  but  for  multiplying  its  results.  The 
labour  of  men  or  the  number  of  workers 
has  not  been  diminished  by  the  adoption  of 
machinery,  but  the  fruits  of  the  same  labour 
have  been  enormously  increased.  Where 
has  the  chief  benefit  gone? 

Before  attempting  to  answer  that  question 
let  us  consider  briefly  another  familiar  topic, 
the  accumulation  of  capital.  Few  men 
work  only  with  their  hands.  The  first 
multiplication  of  product  comes  from  the  use 
of  implements,  or  tools,  and  the  man  who 
has  these  is  possessed  of  capital.  The  vast 
enginery  and  machinery  of  the  most  highly 
developed  industries  are  only  implements 
or  tools,  magnified  and  multiplied.  These 
are  capital.  Land  and  buildings,  and  ma- 
chinery used  in  productive  industry,  are  the 
proceeds  and  savings  of  past  labour  in  fixed 
forms  for  further  employment  in  producing. 
All  such  proceeds  of  labour  thus  saved  and 
made  available  for  such  use  are  capital,  and 
those  who  have  it  control  the  tools  of  produc- 
tion. Who  has  this  control?  Who  benefits 
by  it?  There  is  no  denying  that  the  mass 


Unrest  D\ie  to  Unfair  Division    31 

of  "working-men"  have  shared  in  the  benefit 
and  are  better  off  for  the  greatly  enlarged 
production  of  modern  times;  but  have  they 
received  their  full  share  of  the  benefit? 

It  is  the  comparatively  few  of  the  stronger 
among  men,  those  more  highly  endowed 
with  ability  and  the  qualities  favourable 
to  success,  more  favoured  by  inheritance  or 
environment  or  by  circumstances  and  oppor- 
tunities, that  hire  the  labour  of  many  who 
cannot,  under  modern  conditions,  live  by 
working  for  themselves.  As  a  rule  they  pay 
for  this  labour  what  they  are  obliged  to  pay 
in  order  to  get  it.  The  labourers  depend 
upon  the  work  for  a  living  and  there  are 
many  of  them.  They  have  nothing  else  to 
depend  upon,  and  if  they  have  to  compete 
for  the  employment,  they  must  take  what 
they  can  get.  Employers  may  compete  for 
their  service,  but  there  are  fewer  of  them, 
they  are  less  dependent,  and  they  have 
certain  common  interests  which  lead  them  to 
some  extent  to  act  in  concert.  If  wages  are 
determined  only  by  competition,  the  em- 
ployers have  the  advantage  and  get  more 
than  their  fair  share  of  the  fruits  of  labour. 
The  others  have  to  work  to  live.  These  have 
to  hire  only  to  increase  their  wealth.  In  a 


32  Honest  Business 

contest  these  can  endure.  The  others  have 
to  yield  or  starve. 

Those  who  have  the  capital  and  the  tools 
of  production  own  the  farms,  the  forests, 
the  mines,  the  mills  and  factories,  the  means 
of  transportation  and  of  exchange  of  pro- 
ducts; and  they  hire  the  labour.  The 
advantage  is  enormous  and  is  not  measured 
by  the  difference  in  capacity  or  ability, 
either  to  work  or  to  direct  the  agencies  of 
labour.  It  is  a  cumulative  and  accumulated 
advantage,  and  it  puts  the  most  powerful 
weapons  in  the  hands  of  the  strongest  men. 
Under  the  operation  of  selfish  instincts,  it 
increases  the  profits  of  capital  and  the 
compensation  of  "ability"  out  of  proportion 
to  any  increase  in  the  wages  of  labour  or 
the  compensation  of  industrial  "skill."  It 
widens  the  difference  in  the  condition  of 
men  out  of  proportion  to  the  natural  differ- 
ence in  capacity  or  any  acquired  difference 
in  character.  There  is  in  the  result  an 
injustice,  a  lack  of  equity,  which  breeds  dis- 
content, and  impairs  actual  efficiency.  It 
requires  something  for  its  correction  which 
the  "principles  of  political  economy,"  as 
heretofore  expounded  do  not  supply. 

In  spite  of  the  increase  in  population  in 


Unrest  Dxie  to  Unfair  Division    33 

modern  times,  in  countries  of  what  we  are 
pleased  to  call  advanced  civilisation,  there 
has  been  proportionately  a  much  larger 
increase  in  the  production  by  human  labour 
in  one  form  and  another  of  those  things 
which  sustain  life  and  contribute  to  its 
comfort  and  embellishment.  The  results 
have  been  very  unevenly  diffused,  and  there 
is  need  of  some  method  or  system  which  will 
distribute  them,  not  equally  but  equitably. 
As  there  are  differences  in  capacity  and 
efficiency,  differences  in  the  practical  results 
due  to  the  efforts  of  men,  there  are  also 
natural  and  just  differences  in  the  rewards 
they  reap.  Those  who  for  generations  have 
gained  control  of  land  and  its  resources,  who 
have  accumulated  or  inherited  capital,  who 
have  mastery  of  the  facilities  and  appliances 
for  multiplying  the  results  of  labour,  still 
"have  the  whip  hand"  almost  as  completely 
as  those  who  used  to  own  the  labour  or  compel 
it  to  its  tasks.  They  are  able  to  arrogate 
to  themselves  far  more  than  the  share  of  the 
proceeds  to  which  they  are  justly  entitled 
on  account  of  their  "investments"  of  capital, 
and  of  their  service  in  planning,  directing,  and 
managing  industries  and  the  agencies  for 
affecting  the  distribution  and  exchange  of  the 


34  Honest   Business 

products  of  labour.  They  are  able  to  get 
more  than  fairly  belongs  to  them,  and  most 
of  them  use  that  power  with  effect,  some 
without  scruple,  and  some  because  they  be- 
lieve they  are  entitled  to  the  result  for  their 
superior  endowment  in  property  and  in 
ability  and  character.  They  consider  them- 
selves benefactors  of  workmen  in  giving 
them  a  chance  to  "make  a  living"  while 
they  "make  money,"  and  feel  bound  only 
to  "treat  them  right,"  being  themselves  the 
judges  of  what  constitutes  right  treatment. 
Its  measure  is  apt  to  be  that  which  will 
retain  the  labour  and  keep  it  peaceable  and 
efficient;  calculated  also  to  keep  it  in  a  state 
of  dependence.  Labour  as  distinguished 
from  capital,  workmen  as  distinguished  from 
employers,  do  not  always  receive  their  full 
share,  and  this  is  the  source  of  unrest  and 
discontent,  and  of  the  "labour  troubles," 
which  entail  a  vast  deal  of  loss  in  the  indus- 
trial world.  Economic  science,  truly  formu- 
lated and  applied,  ought  to  suggest  a  remedy 
that  is  attainable  and  that  will  work  a  uni- 
versal benefit.  Thus  far  there  is  empirical 
treatment  and  many  nostrums,  but  no  cure. 
Many  are  the  misdirected  efforts  for  amelio- 
rating conditions,  on  the  side  of  both  labour 


Unrest  D\ie  to  Unfair  Division    35 

and  capital,  of  workmen  and  employer;  but 
an  essential  ingredient  is  lacking  in  the 
remedies  suggested  or  attempted.  A  clear 
sense  of  justice  and  a  desire  to  do  justice 
are  what  is  wanting. 


THE  USE  OF  MONEY  AND  CREDIT 

BEFORE  going  farther  in  considering  the 
relations  of  those  who  pay  and  are 
paid,  whether  in  buying  and  selling  or  in 
hiring  and  being  hired,  it  is  desirable  to  have 
a  clear  idea  of  the  use  of  money  and  credit. 
As  it  is  hoped  that  the  readers  of  this  volume 
may  include  many  who  have  not  been  stu- 
dents of  the  subject  and  have  not  acquired 
a  knowledge  of  its  technicalities,  we  will 
endeavour  to  set  forth  what  it  is  essential  to 
understand  as  clearly  and  concisely  as  may 
be. 

Much  confusion  of  mind  is  caused  by  the 
use  of  the  word  money  in  more  than  one 
sense.  We  speak  of  a  man  as  being  "  worth  " 
so  much  money,  or  having  so  much  money, 
when  we  refer  to  the  extent  of  his  wealth; 
but  the  wealth  may  consist  of  a  variety  of 
possessions  in  tangible  property  and  in 
investments  representing  shares  in  the  loans 
36 


THe  Use  of  Money  and  Credit     37 

or  in  the  properties  and  business  of  corpora- 
tions. A  very  rich  man  may  have  little 
money  at  any  particular  time,  but  he  has 
the  means  of  getting  it  whenever  he  wants  it, 
in  any  desired  sums.  He  may  have  a  dozen 
bank  accounts  and  these  may  be  large,  and 
he  is  said  to  have  a  great  deal  of  money  in 
bank,  but  what  he  has  there  is  not  money 
but  credit.  Strictly  speaking  he  has  no 
money  in  the  banks.  What  he  deposits 
there  is  to  buy  credit,  and  it  puts  the  bank 
under  obligation  to  pay  him  or  to  pay  others 
on  his  order,  such  sums  as  he  may  demand 
within  the  limit  of  his  deposit  or  the  balance 
maintained.  Little  of  what  he  deposits  is 
actual  money,  and  that  no  longer  belongs 
to  him.  It  belongs  to  the  bank  and  is  not 
reserved  for  him  but  is  used  by  the  bank  in 
its  business.  There  may  be  no  money  at 
all  in  what  he  deposits.  It  may  consist  of 
checks  or  orders  upon  his  own  or  other  banks, 
which  he  has  received  for  money  due  him. 
These  transfer  from  others  to  him  the  right 
to  receive  certain  amounts,  and  he  transfers 
this  right  to  the  bank  in  which  he  makes  the 
deposit  and  retains  the  right  to  get  it  from 
that  bank  as  it  is  wanted,  or  to  transfer  it 
to  others  with  his  own  checks.  These  pay- 


38  Honest   Business 

ments  and  collections  through  banks  re- 
present values,  something  to  be  paid  for;  but 
comparatively  little  actual  money  may  pass 
in  and  out  of  the  banks  or  from  hand  to 
hand  in  transactions  involving  thousands  or 
millions  of  dollars. 

When  we  talk  about  making  money  or 
earning  money,  it  is  not  money  that  we  are 
after.  Money  is  of  no  use  except  as  a  means 
of  getting  other  things.  The  man  who  is 
said  to  be  "making  money"  is  merely 
getting  gain  and  acquiring  property  in  one 
way  or  another,  and  that  gives  him  the 
command  of  money  so  far  as  he  may  have  use 
for  it;  but  he  does  not  "make"  it  and  he 
may  never  have  much  on  hand.  The  man 
who  is  said  to  be  earning  money  is  merely 
earning  a  living,  and  perhaps  a  little  more, 
which  he  can  save.  He  is  usually  paid  in 
money,  which  he  has  to  pay  away  about  as 
fast  as  he  gets  it  for  rent  and  the  means  of 
subsistence.  That  is  what  money  is  good  for 
to  him,  and  what  he  gets  for  his  work  is  the 
things  he  pays  for  with  it.  His  real  wages 
are  measured  by  what  he  can  get  with  the 
money  that  is  paid  to  him. 

What  then  is  money  in  the  strict  sense  of 
the  term?  It  is  said  to  be  the  "measure 


THe  Use  of  Money  and  Credit     39 

of  value"  and  the  "medium  of  exchange," 
but  what  does  that  mean?  The  fact  is  that 
all  the  transactions  of  our  lives  consist  in 
giving  one  thing  of  value  for  another,  part- 
ing with  something  we  have  to  get  something 
else  that  we  want.  What  we  have  may  be 
commodities  of  some  kind,  materials  to  be 
worked  up,  or  products  ready  for  use,  which 
we  have  made  or  acquired  from  others,  or  it 
may  be  ability  or  capacity  for  labour  or 
service  in  the  world's  work.  We  furnish  one 
kind  of  commodity  to  get  another,  or  we 
furnish  labour  or  service  to  others  in  order 
to  get  the  kinds  of  commodities  that  we  want ; 
but  it  is  only  in  the  most  primitive  state  of 
society  that  this  can  be  done  directly  by 
barter.  We  need  some  one  thing  that  every- 
body can  take  for  what  he  supplies  and  can 
give  for  what  he  wants,  to  save  the  trouble 
of  hunting  up  those  with  whom  we  wish  to 
exchange.  This  one  thing  must  have  a 
value  equal  to  what  it  pays  for  or  what  it  is 
received  for,  in  order  to  be  a  safe  "medium 
of  exchange." 

This  thing  is  money,  the  only  real  money. 
It  is  worth  in  itself  just  as  much  as  it  pays 
for  in  something  else  or  is  received  for  in 
return  for  something  else.  The  world 


40  Honest   Business 

settled  down  long  ago  to  the  conclusion  that 
the  best  thing  for  this  purpose  was  the 
"precious  metal"  gold,  and  "standard 
money"  is  now  made  of  that  in  all  countries 
of  highly  developed  industry  and  trade. 
Why  was  gold  settled  upon  by  experience 
as  the  universal  medium  of  exchange? 
Because  it  is  a  relatively  scarce  material,  in 
universal  demand  for  its  utility  or  its  attrac- 
tiveness for  display,  and  consequently  of 
great  value  in  small  compass,  and  of  compara- 
tively little  variation  in  value  in  different 
places  and  at  different  times.  It  is  not 
absolutely  unchangeable  in  value,  because 
there  are  changes  in  the  supply  of  the  metal 
in  relation  to  the  demand  for  its  use.  If 
there  is  a  large  increase  in  its  production 
without  a  corresponding  increase  in  its  use, 
it  will  slowly  depreciate.  If  there  is  a  con- 
siderable increase  in  the  demand  for  its  use 
and  a  less  increase  in  the  supply  available, 
its  value  will  slowly  appreciate.  In  the 
former  case  the  prices  of  things  measured  by 
it  and  exchanged  for  it  will  rise.  In  the 
latter  case  they  will  fall. 

In  spite  of  the  fact  that  gold  is  not  abso- 
lutely invariable  it  is  the  best  material  there 
is  in  all  the  products  of  nature  for  use  as 


TKe  Use  of  Money  and  Credit     41 

money  in  effecting  the  exchange  of  other 
things.  It  is  the  least  variable  that  we  have 
in  sufficient  quantity.  It  is  most  convenient 
because  it  has  large  value  in  small  compass 
and  can  be  easily  wrought  into  pieces  of 
different  size  to  represent  different  values  in 
exchange.  It  is  readily  coined  and  stamped 
to  certify  the  value  of  the  pieces  so  as  to 
circulate  safely  from  hand  to  hand.  The 
value  of  these  pieces  is  determined  by  the 
weight  of  pure  gold  in  each,  and  if  they  con- 
tain anything  besides  gold,  as  they  usually 
do,  it  is  to  make  them  harder  so  as  not  to 
wear  out  so  easily.  Gold  might  be,  and 
sometimes  is,  exchanged  for  other  things  by 
the  ounce ;  but  to  make  sure  of  the  purity  and 
value  it  is  coined  into  pieces  of  uniform  size 
for  different  denominations  of  money,  and 
stamped  in  a  way  to  give  assurance  that 
the  real  value  is  there.  The  value  is  not  in 
the  stamp  but  in  the  gold.  The  stamping 
must  be  done  by  some  authority  that  can  be 
relied  upon,  and  that  is  why  coining  is  done 
in  each  country  by  its  government  and  it  is 
made  a  crime  for  anybody  else  to  do  it. 

Why  is  gold  called  a  "standard  of  value," 
as  well  as  a  measure  of  value  and  a  medium 
of  exchange,  which  is  due  solely  to  its  own  in- 


42  Honest    Business 

trinsic  value?  Unfortunately  different  coun- 
tries do  not  coin  it  into  pieces  of  the  same 
size,  the  same  degree  of  fineness  of  metal, 
and  consequently  of  the  same  value,  and  do 
not  give  to  these  the  same  denominations 
and  the  same  names.  If  they  did,  exchange 
between  different  countries  would  be  simpler 
and  they  would  have  a  common  standard.  A 
standard  of  weight  or  of  length  or  of  value, 
is  that  to  which  anything  commonly  used 
for  measuring  these  may  be  referred,  or  with 
which  it  may  be  compared,  to  make  sure  that 
it  is  correct.  The  standard  for  money 
might  be  made  of  something  else,  but  in 
most  civilised  countries  it  is  for  reasons 
already  given  of  gold.  But  there  must  be 
a  standard  unit  as  in  other  measures.  For 
the  sake  of  simplicity  and  conciseness  we  will 
refer  only  to  one,  that  of  the  United  States. 
There  the  standard  unit  is  the  dollar,  which 
consists  of  23.22  grains  of  pure  gold,  to 
which  to  give  it  more  firmness  and  durability, 
an  alloy  of  baser  metal  is  added,  making  one 
tenth  of  the  weight  of  the  coin.  This  makes 
the  dollar  25.8  grains  of  gold  nine-tenths 
fine.  The  value  of  the  dollar  is  in  the  gold. 
The  coin  of  that  denomination  is  small  and 
little  used,  but  multiples  of  it  are  made  for 


THe  Use  of  Money  and  Credit     43 

greater  convenience,  chiefly  five,  ten,  and 
twenty  dollars.  These  contain  exactly  five, 
ten,  and  twenty  times  as  much  gold  as  the 
dollar. 

This  is  all  quite  elementary  and  ought  to 
be  easily  understood;  but  it  needs  to  be 
firmly  fixed  in  mind  as  fundamental  to  the 
whole  money  question.  It  ought  also  to  be 
easily  understood  that  money  in  the  terms 
of  the  standard  of  one  country  can  be  readily 
converted  into  the  terms  of  another  by  a 
simple  calculation.  An  English  sovereign, 
representing  the  pound  sterling,  is  worth  just 
as  many  times  the  American  dollar  in  ex- 
change as  it  contains  times  the  amount  of 
pure  gold;  and  so  of  the  twenty  franc  piece 
of  France  or  the  gold  coin  of  any  country. 
The  relative  values  depend  entirely  upon 
the  amount  of  gold  in  the  composition  of  the 
coins  and  the  "rate  of  exchange"  between 
them  is  easily  calculated.  If  a  different 
metal  than  gold  is  used  in  a  country  it  has 
to  have  a  fixed  relation  to  it  in  value  in  the 
coinage  or  be  redeemable  in  it  in  order  to 
maintain  its  stability  in  measuring  value. 
For  instance,  a  larger  coin  is  needed  for 
small  values,  as  fractions  of  a  dollar  or  of 
a  pound  sterling,  and  for  that  a  cheaper 


44  Honest   Business 

metal  is  used,  like  silver,  and  for  very  small 
values  copper  or  bronze.  If  these  can 
always  be  exchanged  for  the  standard  coin, 
it  will  not  matter  if  they  are  of  low  intrinsic 
value  in  their  composition  and  not  so  stable. 
They  will  circulate  on  account  of  their 
convenience  and  the  fact  that  full  value  can 
be  obtained  for  them  at  any  time.  It  does 
not  do  to  make  them  a  standard,  for  two 
standards  cannot  be  used  conveniently  at 
once  for  the  same  measuring  purpose;  and, 
in  the  matter  of  values,  they  cannot  be  kept 
in  the  same  relation  to  each  other,  for  gold 
and  silver  do  not  have  the  same  stability 
and  do  not  vary  together  when  there  is  varia- 
tion in  the  value  of  either.  Silver  alone  may 
be  used  as  a  standard  but  it  is  inferior  to 
gold  for  the  purpose. 

If  now  it  is  understood  what  real  money 
is  and  what  it  is  for,  it  will  be  well  to  consider 
briefly  how  its  use  is  economised  by  substi- 
tutes and  by  credit.  In  a  sense,  the  fractional 
coins,  or  those  made  of  inferior  metal  to  repre- 
sent small  values,  are  not  standard  money, 
but  substitutes  for  it,  used  for  convenience, 
and  keeping  their  value  for  purposes  of 
exchange  because  gold  or  its  equivalent  can 
always  be  had  for  them  at  the  standard  rate. 


THe  Use  of  Money  and  Credit     45 

But  what  are  commonly  treated  as  substi- 
tutes for  real  money  are  circulating  notes,  or 
what  we  in  America  are  accustomed  to  call 
"bills, "  made  of  paper  and  printed  by  govern- 
ment authority  in  more  or  less  artistic  form, 
with  devices  and  official  signatures  to  certify 
value  and  prevent  imitation  or  counterfeiting. 
These  have  practically  no  value  in  them- 
selves, but  they  represent  dollars,  and  will 
pass  for  dollars  in  paying  and  receiving 
payment,  because  dollars  in  gold  can  always 
be  obtained  in  exchange  for  them.  If  it 
cannot  be  obtained  to  the  full  amount 
represented  on  the  face  of  them,  they  depre- 
ciate proportionately  in  their  purchasing 
or  paying  power.  If  it  cannot  be  obtained 
at  all  they  become  worthless  and  will  not 
"pass." 

In  the  United  States  for  some  years  the 
Government  has  issued  coin  certificates, 
which  circulate  in  place  of  the  coin  itself. 
They  differ  from  what  are  commonly  called 
"circulating  notes"  in  not  resting  at  all  upon 
credit,  but  entirely  upon  specie.  They  are 
issued  dollar  for  dollar  for  coin  deposited 
in  the  public  treasury,  and  they  certify  that 
the  holder  of  the  certificates  owns  the  coin 
and  is  entitled  to  receive  it  at  any  time. 


46  Honest    Business 

They  are  more  convenient  to  use,  more  easily 
and  cheaply  renewed  when  worn  or  muti- 
lated, and  they  save  the  coin  from  being 
worn  out  by  handling,  or  lost,  though  of 
course  certificates  may  be  lost  and  not 
replaced.  Their  value  rests  upon  the  actual 
coin  which  they  directly  represent  and 
which  can  be  had  in  their  place  at  any  time. 
As  the  Government  is  always  ready  to  take 
them  back  and  return  the  coin,  banks  will 
make  the  exchange  so  that  there  is  no 
inconvenience  in  the  substitution. 

There  may  be  government  notes  as  a 
substitute  for  money,  but  these  are  a  need- 
less and  undesirable  substitute.  During  the 
stress  of  the  great  civil  war,  when  banks 
suspended,  public  credit  was  strained,  and 
coin  was  scarce,  the  United  States  Govern- 
ment issued  its  own  notes  to  circulate  as 
money,  and  made  them  a  legal  tender  for  the 
payment  of  private  debts.  They  were  not 
money,  but  only  promises  to  pay.  They 
represented  debt,  not  value,  and  depended 
upon  the  credit  of  the  Government,  which 
was  at  the  time  impaired.  Nominally,  they 
were  payable  on  demand,  but  practically 
they  were  not  then  redeemable  at  all,  and 
for  a  long  while  they  depreciated  and 


THe  Use  of  Money  and  Credit     47 

fluctuated  in  current  or  exchange  value. 
Finally,  they  were  made  actually  redeemable 
in  coin,  and  provision  was  made  for  their 
payment  on  demand,  but  when  a  certain 
limit  was  reached  in  their  withdrawal  from 
circulation,  they  were  re-issued  after  pay- 
ment, and  they  have  been  maintained  at 
that  limit  ever  since.  As  an  ample  redemp- 
tion fund  is  kept  on  hand,  and  coin  is  paid 
for  the  notes  whenever  demanded,  they  are  a 
safe  part  of  the  currency  so  long  as  there  is  no 
strain  upon  the  public  credit ;  but  it  would  be 
much  better  to  have  the  redemption  fund 
raised  to  the  full  amount  of  the  outstanding 
notes  and  to  substitute  coin  certificates  for 
them.  It  may  be  added  that  provision  has 
been  made  for  issuing  certificates  on  gold 
bullion  and  foreign  coin  deposited  in  the 
Treasury,  as  well  as  American  standard 
coin,  and  these  may  be  used  as  money. 
They  represent  full  value  in  gold. 

It  may  be  well  to  refer  just  here,  more 
fully,  for  the  purpose  of  illustrating  a  princi- 
ple, to  two  notable  experiences  in  the  finan- 
cial history  of  the  United  States.  Prior  to 
the  Civil  War,  its  "money"  consisted  of 
gold  and  silver  coin  upon  which  were  based 
for  a  time  a  National  as  well  as  a  State  bank- 


48  Honest   Business 

ing  system,  but  for  many  years  State  banking 
systems  only. 

Gold  and  silver  were  coined  at  a  ratio  of 
value  to  each  other  of  15.98  of  the  latter  to 
one  of  the  former,  a  ratio  popularly  known 
as  1 6  to  I.  It  is  impossible  to  keep  together 
on  a  common  basis  two  metals  which  fluctu- 
ate differently  in  value  under  the  influence 
of  the  law  of  supply  and  demand  for  their 
use.  Whenever  the  value  of  one  materially 
exceeds  that  of  the  other  it  will  disappear 
from  the  currency,  to  be  used  for  other  pur- 
poses. For  some  years  before  the  war, 
silver  was  undervalued  in  the  coinage  and 
had  ceased  to  circulate,  except  as  subsidiary 
currency  in  fractions  of  a  dollar,  for  which 
it  was  kept  under  the  standard  weight.  Gold 
has  become  in  practice  the  single  standard. 

When  the  exigencies  of  the  great  conflict 
led  to  a  suspension  of  the  legal  requirement 
of  meeting  all  financial  obligations  in  coin 
or  its  equivalent,  and  to  the  issue  of  a  great 
volume  of  legal  tender  notes,  these  consti- 
tuted the  bulk  of  the  "money"  of  the  time. 
It  depreciated  and  fluctuated  in  value, 
causing  prices  to  rise  and  fall  proportionately 
until  the  time  came  after  the  long  struggle 
to  provide  for  the  redemption  of  the  notes 


THe  Use  of  Money  and  Credit     49 

and  to  restore  specie  payments  on  the  old 
coin  basis  of  gold  and  silver  at  "16  to  I." 
The  promise  and  assurance  of  this  had 
brought  up  the  current  value  of  the  notes 
for  all  payments  substantially  to  the  specie 
basis.  Fulfilment  of  the  promise  was  never- 
theless strenuously  resisted,  and  the  opposi- 
tion of  a  large  part  of  one  political  party  was 
reinforced  by  an  independent  greenback 
party,  "pledged  to  the  perpetuation  of 
government  paper  as  a  legal  tender  for  the 
payment  of  all  debts."  The  policy  it  advo- 
cated was  equivalent  to  a  repudiation  of 
a  floating  debt  by  the  Government,  but  it 
was  founded  in  the  delusion  that  government 
promises  could  be  made  equivalent  to  money, 
whether  they  were  redeemed  in  actual  money 
or  not,  by  printing  upon  them  the  denomina- 
tions of  the  national  currency  and  making 
them  read  as  promises  to  pay. 

Specie  payments  were  re-established  in 
1879,  and  all  government  notes  and  other 
pecuniary  obligations  became  legally  payable 
in  standard  coin.  This  still  consisted  of  both 
gold  and  silver,  but  not  long  after  this  time, 
the  development  of  large  deposits  of  silver 
caused  that  metal  to  decline  in  value  until  it 
fell  to  about  one-half  that  of  gold,  at  the 

4 


50  Honest   Business 

existing  coinage  ratio.  The  inevitable  ten- 
dency was  to  drive  gold  out  of  circulation 
and  cause  it  to  be  exported,  because  it  was 
too  valuable  to  exchange  on  equal  terms  with 
silver.  Only  the  limitation  of  volume  could 
hold  them  together,  and  it  was  a  question 
of  time,  if  the  free  coinage  of  silver  had  been 
kept  up,  when  the  whole  currency  would  have 
been  precipitated  to  the  level  of  its  intrinsic 
value  with  a  crash,  and  yet  there  was  a  strong 
resistance  to  the  suspension  of  the  coinage 
of  "standard  "  silver  dollars  and  the  establish- 
ment of  the  gold  standard,  and  it  took  years 
of  political  tumult  to  accomplish  it.  Free 
silver  coinage  at  the  ratio  of  1 6  to  I  of  gold 
would  have  meant  a  payment  of  debts  with 
half  the  value  received  and  a  doubling  of 
prices;  and  yet  few  who  strove  for  it  realised 
that  fact  or  had  any  dishonest  purpose. 
These  two  causes  of  political  conflict,  the 
"greenback  craze"  and  the  depreciated 
silver  "craze,"  were  the  occasion  of  great 
political  disturbance  and  enormous  loss 
to  the  people  of  the  United  States. 

This  brings  us  to  the  common  and  legiti- 
mate substitute  for  money,  the  circulating 
notes  of  banks.  These  are  not  money  and  do 
not  directly  represent  money.  They  repre- 


XHe  Use  of  Money  and  Credit     51 

sent  credit,  which  should  be  the  credit  of 
the  banks  issuing  them,  and  they  serve  the 
purpose  of  money  because  they  are,  or  ought 
to  be,  payable  on  demand  in  actual  money. 
Anybody  is  willing  to  use  for  money  any 
convenient  substitute  for  which  he  can  get 
money  at  any  time.  That  is  alone  what 
gives  the  substitute  its  "value,"  that  is,  its 
power  to  pay  for  things  wanted.  For  nearly 
fifty  years  the  United  States  had  no  real 
bank-notes.  What  were  called  the  circulat- 
ing notes  of  national  banks  were  engraved 
and  printed  by  the  Government  and  supplied 
to  the  banks  to  be  issued,  but  the  banks 
could  not  get  these  without  depositing  with 
the  public  Treasury  the  full  amount  in 
interest-bearing  bonds  of  the  Government. 
They  were  in  effect  certificates  of  the  deposit 
of  these  bonds,  in  which  the  equivalent 
amount  of  bank  capital  was  locked  up.  They 
rested  upon  government  credit  rather  than 
bank  credit,  and  what  they  circulated  was  in 
effect  the  bonds,  just  as  coin  certificates 
virtually  circulate,  or  pass  from  one  owner 
to  another,  the  coin  which  they  represent. 

This  does  not  at  all  serve  the  proper  pur- 
pose of  a  bank-note  circulation,  and  the  notes 
might  just  about  as  well  be  replaced  with 


52  Honest    Business 

coin  certificates  or  even  with  government 
notes.  The  proper  function  of  a  bank 
circulation,  based  upon  the  credit  of  the 
banks  themselves  and  secured  by  their  own 
assets,  with  an  adequate  reserve  of  coin 
always  on  hand  to  pay  any  notes  that  may 
be  presented  for  payment,  and  the  legal 
obligation  always  to  redeem  them  on  demand, 
is  to  give  flexibility,  or  elasticity,  to  the 
general  volume  of  currency.  The  amount 
of  currency  required  in  the  vast  volume  of 
business  transactions  of  the  country  is 
constantly  varying;  and,  as  in  the  case  of  all 
other  exchangeable  things,  the  supply  should 
be  adjusted  automatically  to  the  demand. 
This  cannot  be  done  by  continually  shifting 
the  amount  of  coin  in  use  and  the  certificates 
representing  it;  nor  can  it  be  done  with  any 
readiness  by  changing  the  amount  of  bonds 
deposited,  for  securing  notes.  But  if  banks 
issue  their  own  notes  on  their  own  credit 
and  their  own  security,  under  proper  regula- 
tion for  safety,  and  redeem  them  as  fast  as 
they  arc  returned  to  them  for  the  purpose  of 
being  redeemed,  they  will  be  issued  when- 
ever there  is  the  pressure  of  demand  for 
more  currency,  and  redeemed  whenever 
there  is  a  shrinking  in  the  demand,  and  the 


THe  Use  of  Money  and  Credit     53 

volume  will  expand  and  contract  according 
to  the  requirements  of  business. 

Speaking  of  currency,  we  ought  to  pause 
and  inquire  just  what  is  meant  by  that  term. 
It  is  more  comprehensive  than  money  or 
substitutes  for  money  which  pass  from  hand 
to  hand.  It  includes  these  and  more.  It  is 
anything  that  is  used  to  effect  the  current 
exchange  or  transfer  of  values  in  commodities 
and  services,  and  credit  is  used  for  the  pur- 
pose much  more  largely  than  money,  though 
all  forms  of  credit  must  rest  upon  actual 
value  in  some  form  and  be  redeemable  in  the 
last  resort  in  standard  money.  Bank  de- 
posits, which  are  credited  to  the  depositors, 
represent  values  that  belong  to  them  and 
upon  which  they  can  draw,  and  in  the  United 
States  and  Great  Britain,  and  in  a  less  degree 
in  some  other  countries,  they  constitute  the 
most  prolific  source  of  "currency."  The 
checks,  or  orders,  which  are  used  in  making 
and  receiving  payment,  thereby  transferring 
the  right  to  draw  upon  the  values,  are  in- 
struments of  currency  as  much  as  bank-notes 
or  coin  itself.  They  are  not  money;  neither 
are  the  notes  of  the  banks.  But  they  can  be 
used  to  draw  from  the  banks  money  represent- 
ing other  value,  when  it  is  needed  or  wanted. 


54  Honest   Business 

The  great  volume  of  business  nowadays 
in  highly  developed  countries  is  done  with 
credit  and  not  with  money,  and  confidence  in 
credit  is  as  important  as  value  in  gold.  We 
need  not  for  our  present  purpose  go  into  the 
intricacies  of  the  credit  system.  The  point 
to  be  insisted  upon  is  that  the  pivot  upon 
which  the  whole  rests  and  revolves  is  solid 
money  of  intrinsic  value,  by  which  all  values 
are  measured,  and  all  exchange  of  values  is 
determined,  and  in  which,  as  a  final  resort, 
any  value  may  be  redeemed.  Credit  .is 
involved  in  the  use  of  bank-notes  and  bank 
deposits.  It  is  involved  in  all  book  accounts 
by  which  charges  and  credits  are  made, 
payments  and  receipts  are  deferred,  and 
periodical  or  occasional  settlements  are 
made.  It  is  involved  in  all  advances  and 
loans  on  security,  or  in  cases  of  assured  confi- 
dence without  other  security  than  a  promise. 
In  all  cases,  back  of  the  security  or  the 
promise,  is  the  substantial  value,  belonging 
to  or  at  the  command  of  the  person  to  whom 
the  credit  is  extended.  The  terms  in  which 
it  is  calculated  are  the  terms  of  money.  It 
is  measured  and  computed  in  dollars.  The 
dollar  is  the  unit  of  all  the  exchangeable 
values  represented,  and  those  values  are 


THe  Use  of  Money  and  Credit     55 

certain  and  stable  because  dollars  in  money 
may  be  had  for  them  at  need.  If  the  dollars 
were  not  there,  with  the  definite  and  stable 
value  in  themselves,  and  if  they  could  not  be 
had  in  exchange  for  other  values  and  in  the 
liquidation  of  credits,  the  huge  fabric  of 
credit  would  have  nothing  solid  to  rest  upon 
and  could  not  be  held  together. 

The  proportion  of  money  to  the  values 
that  are  being  constantly  exchanged  or  to  the 
payments  that  are  being  continually  made 
with  instruments  of  credit  is  small.  It  need 
only  be  amply  sufficient  to  meet  the  demand 
in  settling  balances  and  making  payments 
in  which  the  actual  money  is  wanted  for  the 
many  small  uses  of  every- day  life,  with  a 
proper  margin  of  safety  for  emergencies  or 
unusual  demands.  This  suggests  how  vastly 
important  is  confidence  in  the  system  that 
has  been  built  up  and  in  the  integrity  of 
those  whose  operations  are  dependent  upon 
its  successful  working.  If  from  failure  here 
and  there  confidence  is  impaired  and  the 
demand  for  actual  money  is  greater  than  the 
supply  immediately  available,  there  comes  a 
strain,  a  spread  of  distrust,  alarm,  a  crisis; 
and,  if  panic  cannot  be  stayed  and  the  situa- 
tion controlled  by  the  wise  use  of  resources, 


56  Honest    Business 

there  will  be  a  disastrous  collapse  which  it 
will  take  months,  perhaps  years,  to  repair. 
To  avoid  this  the  system  of  credit  must  be 
well  devised  and  soundly  secured,  so  that 
values  may  be  as  freely  and  safely  exchanged 
as  possible  without  using  money,  but 
sufficient  money  must  be  at  command  to 
meet  every  requirement. 


VI 

MEANING  OF  WAGES,  PROFITS,  AND  PRICES 

IF  now  we  have  a  clear  idea  of  what  money 
means  and  what  its  use  is,  there  is  another 
elementary  subject  that  should,  if  possible, 
be  made  equally  clear.  The  object  of  all 
labour  and  effort,  whether  of  muscle  or  brain, 
— and  in  a  greater  or  less  degree  according 
to  endowment  and  training,  muscle  and 
brain  must  work  together — and  of  the  use  of 
capital  to  increase  the  results  of  their  applica- 
tion is  not  to  get  money  for  its  own  sake,  but 
to  get  those  things  which  sustain  our  lives 
and  minister  to  our  comfort  and  enjoyment. 
What  really  matters  is  not  the  amount  of 
money  we  get,  but  the  amount  of  those 
things  which  money  is  used  to  buy,  for  it  is 
only  a  "medium  of  exchange,"  something 
that  we  receive  for  what  we  give  in  labour  or 
the  product  of  labour,  in  order  to  pay  it  out 
for  what  we  wish  to  obtain  in  other  labour 
or  the  product  of  labour.  The  things  really 
57 


58  Honest   Business 

exchanged  are  the  labour  or  service  or  their 
products,  and  the  money  only  enables  us  to 
bring  about  the  exchange  of  what  we  have 
for  what  we  want.  For  labour  or  service  we 
receive  wages  or  salary,  and  ordinarily  we  re- 
ceive it  in  money,  for  which  we  have  no  use 
except  to  spend  it  for  what  we  want  now  and 
to  save  what  we  may  to  spend  or  have  some- 
body else  spend  in  the  future. 

What  we  get  for  our  work,  then,  be  it  the 
work  of  muscle  or  brain,  is  measured  not  by 
the  number  of  dollars  received,  but  by  what 
the  dollars  will  buy  in  rent  for  shelter,  food, 
and  raiment  and  the  comforts,  pleasures,  and 
enjoyments  of  life.  If  our  wages  are  low 
and  the  cost  of  these  is  correspondingly  low, 
we  are  just  as  well  off  as  though  wages  were 
high  and  costs  were  correspondingly  high, 
provided  there  is  the  same  amount  of  pro- 
duction and  we  get  in  each  case  our  fair 
share  of  what  we  help  to  produce.  By  pro- 
duction we  mean  everything  that  contributes 
to  getting  the  needed  or  desired  things  from 
their  natural  sources  to  those  who  are  to  have 
and  enjoy  them  in  their  final  form  for  con- 
sumption or  use.  Wages  are  what  workmen 
get  for  their  "labour, "  and  salaries  are  what  a 
different  grade  of  hired  persons  get  for  their 


"Wages,  Profits,  and  Prices        59 

"services."  There  is  no  difference  in  princi- 
ple. The  difference  is  only  in  the  use  of 
words.  All  are  workers  and  all  get  paid. 
What  signifies  to  them  is  the  amount  of 
their  pay  measured  in  what  they  can  get 
with  it. 

There  are  workers  who  do  not  get  paid  in 
wages  or  salaries  because  they  work  for 
themselves,  and  in  many  cases  they  hire 
others  to  work  for  them  also.  Some  work 
for  themselves  without  help  and  a  few  hire 
others  to  work  for  them  or  have  them  hired 
and  pay  them,  and  do  not  work  themselves, 
except  to  look  after  getting  and  spending 
their  income.  What  they  contribute  to 
production  is  capital,  that  is,  tools  and 
appliances  of  production.  They  may  also 
contribute  the  oversight  that  makes  the  use  of 
capital  effective  and  prevents  waste,  or  they 
may  leave  that  to  others.  How  do  the 
capitalists  and  employers  get  their  pay? 
They  are  entitled  to  pay  for  the  part  they 
contribute  to  production,  and  that  is  often  a 
large  part.  Their  capital  is  the  product  of 
past  labour,  but  it  has  become  theirs  and  they 
are  using  it  in  new  production.  They  may 
be  using  it  in  connection  with  others  in  a  way 
greatly  to  increase  production  in  proportion 


60  Honest   Business 

to  the  number  of  persons  employed,  and 
therefore  for  the  benefit  of  all.  They  may 
be  exceptionally  endowed  with  ability  and 
training,  with  enterprise  and  capacity  for 
management.  These  qualities  make  the 
difference  between  success  and  failure,  and 
determine  the  degrees  of  success.  They  are 
entitled  to  a  just  compensation  for  their 
services  as  well  as  for  the  use  of  their  capital, 
for  others  benefit  by  these  and  wages  and 
salaries  are  higher,  or  ought  to  be  so,  on 
account  of  what  they  do. 

There  are  the  owners  of  land  who  command 
the  resources  of  the  soil  and  of  forests  and 
mines.  There  are  builders  of  furnaces  and 
factories  and  workshops.  There  are  those 
who  furnish  facilities  for  transportation  and 
for  collecting  and  distributing  the  products 
of  industry.  There  are  the  traders  with 
their  warehouses  and  stores  and  their  service 
in  buying  and  selling  as  intermediaries 
between  those  who  only  sell  in  the  first 
instance  and  those  who  only  buy  in  the  last 
instance.  There  are  the  bankers  who  handle 
the  vast  volume  of  money  and  credit  neces- 
sary for  effecting  the  operations  of  produc- 
tion and  of  trade  and  exchange,  on  the  great 
and  complex  scale  of  modern  times.  These 


\STag£es,   Profits,   and  Prices        61 

all  contribute  in  their  several  ways  and  de- 
grees to  production  for  the  common  good. 
How  are  they  paid  for  their  services  and  the 
use  of  their  property?  In  the  profits  of 
business,  or  the  difference  between  what  it 
costs  them  to  do  their  work  and  supply  their 
facilities  and  what  they  get  for  it.  It  is 
for  their  interest  to  make  their  part  contri- 
bute as  much  as  possible  to  large  production, 
to  make  it  cost  as  little  as  possible  by  the 
most  efficient  and  economical  methods,  and 
to  get  as  much  for  it  as  they  can. 

What  they  can  get  depends  a  great  deal 
upon  competition  among  them  for  the 
rewards  of  business.  We  are  not  going  into 
the  details  of  economic  principles  and  their 
working  in  practice;  but  it  may  be  necessary 
to  remind  the  reader  that  men  with  capital 
and  business  ability  look  about  for  employ- 
ment, as  well  as  other  workers,  and  they  go 
into  that  which  they  think  will  pay  them 
best.  Their  rivalry  for  getting  into  the 
best  paying  business  begets  a  competition 
that  tends  to  establish  a  common  level  of 
profit  for  the  use  of  capital  and  of  ability 
to  manage  its  use  in  different  lines  of  employ- 
ment. In  the  same  line  there  will  be  rivalry 
for  doing  the  best  in  it,  and  competition 


62  Honest   Business 

between  those  with  varying  amounts  of 
capital  and  different  degrees  of  ability.  The 
best  equipped  in  capital  and  ability  will  be 
most  successful.  They  will  exercise  the 
greatest  efficiency  and  economy  in  reducing 
cost  and  increasing  results  to  widen  the 
margin  of  profit.  Men  who  work  for  them- 
selves and  hire  others  take  risks,  and  there 
is  every  degree  of  success  and  failure  among 
them.  Some  get  rich  and  some  get  poor. 
What  they  are  working  for  is  profits,  and  in 
any  single  business  these  vary  greatly.  Here 
again  is  one  of  the  factors  which  tend  to 
produce  inequality  in  the  condition  of  men. 
Profits  from  production  and  trade  in  the 
same  line  differ  from  various  causes  besides 
amount  of  capital  employed  and  the  ability 
with  which  it  is  used.  Circumstances  of 
place  and  time  affect  them,  and  these  are 
liable  to  change.  Supplies  of  needed  mate- 
rial and  demand  for  finished  products  may 
shift  in  ways  that  cannot  be  foreseen,  and  the 
needed  labour  force  may  become  unstable. 

The  real  regulator  of  profit  is  and  must  be 
competition,  and  it  is  a  just  regulator  so 
long  as  it  is  fair  and  honest ;  but  in  the  hands 
of  the  strong  against  the  weak  it  may  be  a 
terrible  instrument  of  destruction  if  un- 


,   Profits,  and  Prices        63 

scrupulously  employed.  Our  point  just  now 
is  simply  that  profit  is  the  reward  of  the 
capitalist  and  employer,  and  the  amount 
of  that  reward,  as  in  the  case  of  labour,  is 
determined,  not  by  the  reckoning  in  dollars, 
but  by  what  the  income  will  procure  for  its 
recipient  in  the  things  that  satisfy  his  wants. 
A  moderate  profit  with  a  low  cost  of  things 
may  command  as  large  a  portion  of  those 
things  as  a  high  profit  when  the  cost  of  them 
is  high.  This  brings  us  to  consider  what  is 
meant  by  the  value  and  the  prices  of  things. 
Everybody  thinks  he  knows,  but  there  is  a 
good  deal  of  confusion  in  thinking. 

Whatever  may  be  said  by  professional 
economists,  value  is  not  in  itself  a  definite 
or  a  strictly  definable  thing.  With  reference 
to  any  particular  object  it  depends  upon 
what  people  think  of  it  or  how  much  they 
care  for  it,  and  it  is  only  by  comparing  one 
thing  with  another  in  that  respect  that  any 
statement  of  value  can  be  made.  Some 
things  are  valued  because  they  are  necessary 
to  support  life,  some  because,  though  they 
may  not  be  necessary,  they  are  desirable 
for  convenience  or  comfort,  some  because 
they  give  pleasure,  and  some  because  they 
minister  to  vanity.  Some  are  more  desired 


64  Honest    Business 

than  others  by  people  in  general,  but  people 
differ  greatly  in  their  desires.  Some  things 
are  attractive  to  certain  persons  which  others 
care  little  or  nothing  for,  and  there  is  every 
degree  of  variation,  except  for  things  which 
are  necessary,  and  in  regard  to  those  desires 
and  tastes  differ.  The  same  things  are  dif- 
ferently valued  in  different  countries  and 
in  different  stages  of  human  development. 
Nevertheless,  with  means  of  intercourse 
and  communication  and  ease  of  exchanging 
one  thing  for  another,  a  sort  of  general  or 
relative  value  is  established  for  all  the  objects 
of  human  desire.  A  sort  of  fluctuating 
average  is  found,  and  from  that  value  varies 
with  the  abundance  or  scarcity  of  desired 
objects  and  the  difficulty  or  case  of  obtaining 
them.  An  article  much  desired  and  scarce 
or  hard  to  get  has  a  high  value,  though  it 
may  be  of  little  use.  Carbon  in  the  form  of 
coal  is  useful  but  plenty  and  cheap.  Carbon 
in  the  form  of  diamonds  has  a  certain  re- 
stricted use,  which  would  not  make  it  of 
very  high  value,  but  diamonds  are  much 
desired  for  their  beauty  as  ornaments,  and 
that  makes  them  valuable.  A  picture  or  a 
book  may  have  no  great  merit  or  attraction, 
but  may  be  so  scarce  or  so  associated  with 


"Wages,  Profits,  and  Prices       65 

some  famous  name  or  event  that  its  posses- 
sion is  coveted,  and  that  gives  it  a  high  value. 
Value  is  a  relative  thing,  and  in  order  to 
make  it  definite  we  must  have  a  standard 
of  comparison,  something  by  which  to  meas- 
ure the  value  of  different  things  as  they 
are  estimated  by  mankind,  and  to  form  a 
basis  for  exchanging  one  thing  for  another 
in  trade.  We  have  seen  that  what  we  call 
money  affords  a  means  of  measuring  values 
and  effecting  exchanges,  but  we  must  have 
terms  in  which  to  express  and  to  reckon 
values.  We  must  know  how  much  of  each 
commodity  or  service  corresponds  in  value  to 
a  dollar  or  fraction  of  a  dollar.  We  have 
our  denominations  of  money,  expressing  the 
unit  and  the  divisions  and  multiples  of  the 
unit  of  its  value;  and  we  have  our  denomi- 
nations of  quantity  in  the  things  to  be 
exchanged,  measured  by  size  or  weight,  or 
in  the  case  of  labour  or  service  by  the  time 
occupied  or  the  amount  of  contribution  to 
product.  Thus  we  are  able  to  express  how 
much  a  certain  quantity  is  worth  in  dollars 
and  cents.  In  the  case  of  labour,  we  express 
this  as  so  much  a  day  or  week,  or  month,  or, 
it  may  be,  a  year;  or  so  much  for  the  yards 
or  tons  or  other  quantity  which  the  labour 


66  Honest   Business 

helps  to  produce.  We  call  what  is  paid  for 
the  labour  wages  or  salary.  In  the  case  of 
commodities  we  call  it  prices.  There  is  no 
distinction  in  kind,  and  wages  may  be 
regarded  as  the  prices  of  different  kinds 
and  amounts  of  labour. 

The  common  word  price,  therefore,  desig- 
nates how  much  in  money  must  be  paid  for 
a  certain  quantity  of  each  several  thing  that 
enters  into  trade,  or  is  to  be  sold  or  bought. 
It  is  an  expression  of  the  value  in  terms  of 
money  of  each  thing  to  be  disposed  of  and 
affords  a  means  of  reckoning  or  computing 
values  in  all  the  exchanges  of  products  that 
go  on  from  the  time  they  are  derived  from 
the  resources  of  nature  until  through  pro- 
cesses of  extracting,  making,  transporting, 
and  distributing  they  reach  the  "ultimate 
consumer."  We  need  not  dilate  further 
upon  what  price  means,  but  a  few  words 
upon  what  determines  price  may  be  desir- 
able to  supplement  what  has  been  said  about 
the  determination  of  value. 

This  may  make  the  matter  a  little  clearer, 
now  that  we  have  the  means  of  making  value 
definite  in  prices.  We  have  said  in  a  general 
way  that  the  value  of  different  things  depends 
upon  how  plentiful  or  scarce  they  may  be, 


Wag'es,  Profits,  and  Prices        67 

how  easy  or  difficult  it  may  be  to  obtain 
them,  and  how  much  they  may  be  desired. 
In  treating  of  prices  it  is  common  to  say 
that  they  depend  upon  the  relation  of  supply 
and  demand,  which  is  another  way  of  putting 
the  same  thing. 

The  price  of  anything  is  low  when  it  is 
common  and  abundant  and  easily  got,  or 
when  nobody  cares  or  thinks  much  about  it; 
and  the  price  is  high  when  the  thing  is  scarce, 
difficult  to  obtain,  and  much  desired.  Prices 
may  range  from  nothing  for  air  and  water 
and  the  sand  which  is  on  the  seashore  to  a 
fortune  for  rare  gems  and  unique  works  of 
art,  and  there  is  every  variation  between. 
Everywhere  and  always  the  price  of  each 
thing  will  depend  upon  the  relation  of  supply 
and  demand,  or  the  quantity  to  be  had  and 
the  strength  of  the  desire  to  have  it,  coupled 
with  the  means  of  getting  it.  With  most 
things  which  satisfy  the  wants  of  man  the 
supply  is  constantly  varying.  New  resources 
may  be  discovered  and  opened  up;  methods 
of  availing  of  them  may  be  made  more 
effective;  processes  of  putting  them  in  form 
for  use  may  be  improved,  and  so  the  supply 
may  be  increased.  On  the  other  hand,  there 
may  be  a  dwindling  of  resources  by  exhaus- 


68  Honest   Business 

tion,  wasteful  methods,  or  neglect;  or  the 
means  of  availing  of  them  may  deteriorate. 
Then  the  supply  will  be  diminished.  In 
case  of  products  of  the  soil  the  supply  is 
affected  by  climatic  changes,  and  so  on. 
The  main  point  is  the  continual  variation  of 
supply  from  changing  conditions  of  one  kind 
or  another.  On  the  other  hand  demand 
changes  from  time  to  time.  Change  may 
come  from  increase  or  decrease  of  population 
or  shifting  conditions  which  increase  or 
diminish  the  capacity  of  people  to  provide 
for  their  wants  or  which  modify  their  tastes 
and  desires.  This  ought  to  be  understood 
without  pursuing  it  into  further  detail.  It 
is  one  of  the  firmly  established  principles 
of  economics.  This  general  reminder  is 
only  preliminary  to  considering  the  force 
of  the  more  directly  human  factor  in 
determining  wages  and  prices. 


VII 

RIGHT    AND    WRONG    IN    FIXING    WAGES    AND 
PRICES 

PROFESSIONAL  economists  have  elevated 
the  principle  of  the  relation  of  supply 
and  demand  into  a  "law,"  which  they  are 
apt  to  treat  as  a  law  of  nature,  like  gravita- 
tion, which  works  automatically  and  in 
spite  of  human  effort.  Man  can  by  ingenious 
devices  make  the  law  of  gravitation  serve 
his  purposes,  but  its  operation  is  not  depen- 
dent upon  his  will.  There  is  no  inexorable 
law  of  supply  and  demand  for  those  things 
derived  from  earth  and  air  to  sustain  the 
life  and  satisfy  the  wants  of  man,  for  by  his 
efforts  he  produces  the  supply  from  sources 
provided  by  nature,  and  the  demand  comes 
from  his  own  desires. 

The  human  element  is  predominant  in  the 

relation  of  supply  and  demand  and  exercises 

a  potent  control.     This  depends  not  merely 

upon  the  capacity  and  power  of  men,  but  in 

69 


~o  Honest   Business 

no  small  degree  upon  their  sentiment,  and  has 
its  moral  or  ethical  side.  The  question  of 
human  rights  and  of  the  duty  of  men  to  each 
other  is  involved,  and  there  is  no  such  law 
that  works  in  spite  of  human  volition. 
Economists  have  had  a  "doctrine"  as  well 
as  a  law  in  regard  to  this  matter  of  supply 
and  demand,  which  determines  what  share 
of  the  product  of  human  activity  for  satisfy- 
ing wants  shall  go  to  labour  in  wages  and  what 
shall  go  to  capital  in  profits,  and  consequently 
which  determines  the  rate  of  wages  for  differ- 
ent kinds  of  work  and  the  price  of  commodi- 
ties in  selling  and  buying. 

This  doctrine  used  to  be  dignified  by  the 
French  phrase  laissez-faire,  "let  alone,"  which 
in  effect  is  the  same  as  free  and  untrammelled 
competition,  free  from  moral  considerations 
and  untrammelled  by  a  sense  of  human  duty, 
as  if  it  were  based  upon  an  immutable  divine 
law  which  the  human  will  should  not  venture 
to  interfere  with.  It  was  analogous  to  the 
later  doctrine  of  evolution  in  the  physical 
world,  which  lets  force  have  its  own  way  with 
matter,  crushing  out  and  treading  down  the 
weak  and  defective  and  letting  only  the 
fittest  survive,  and  thus  ruthlessly  making 
progress  toward  a  more  perfect  state  of 


Fixing'  "Wag'es  and  Prices         71 

things.  This  is  quite  scientific  and  proper 
in  the  physical  world,  but  when  it  comes  to 
the  life  of  men  new  considerations  enter  in. 
The  doctrine  is  one  of  the  supremacy  of 
selfishness  in  human  nature  and  human 
action,  as  leading  to  the  best  results;  but  a 
different  doctrine  has  been  introduced  into 
the  conduct  of  human  affairs,  and  for  a  long 
time  the  best  teachers  of  the  race  and  leaders 
in  progress  have  refused  to  let  things 
alone  to  go  their  own  gait  in  the  process  of 
development. 

Let  us  hark  back  to  first  principles  for  a 
moment.  The  one  great  object  of  all  human 
activity  of  the  kind  of  which  the  "science 
of  economics"  treats,  is  to  produce  from  the 
bounty  of  nature  in  the  fullest  measure  those 
things  which  minister  to  the  varied  wants  of 
man,  and  to  distribute  them  among  mankind 
in  the  form  best  adapted  to  serve  their 
purpose,  whether  of  mere  subsistence  or  of 
satisfaction  or  enjoyment.  The  distribution 
is  quite  as  important  as  the  production,  and 
in  its  control  there  is  great  opportunity  for 
the  application  of  the  Rob  Roy  principle, 
of  robbing  the  weak  to  enrich  the  strong. 
How  is  the  labourer  for  hire  to  get  his  share? 
Only  in  the  wages  paid  him  for  his  part  of 


72  Honest   Business 

the  work  all  along  the  line  from  start  to 
finish  and  the  command  which  such  wages 
give  him  over  the  products  in  the  course  of 
their  distribution.  The  more  effective  his 
labour  or  the  more  value  it  has  for  the  purpose 
for  which  it  is  employed,  the  more  he  ought 
to  get  for  it  as  his  share. 

How  is  the  capitalist  or  employer  to  get 
his  share?  In  the  profit  he  can  make  out 
of  the  conduct  of  his  part  in  the  business 
of  the  world,  and  that  will  depend  upon  the 
charges  for  the  service  he  renders  or  the 
prices  of  the  things  he  produces  to  sell  or 
buys  to  sell  again  in  the  processes  of  distribu- 
tion. The  margin  of  profit  will  depend  on 
one  side  upon  getting  as  much  production  as 
possible  at  the  lowest  cost,  and  on  the  other 
side  upon  getting  as  high  prices  as  are  obtain- 
able in  disposing  of  products.  This  will 
apply  at  all  stages  of  the  process  of  produc- 
tion and  distribution,  and  to  all  the  agencies 
engaged  in  carrying  it  on.  Intelligent  selfish- 
ness dictates  that  cost  of  getting  work  done 
shall  not  be  crowded  down  so  as  to  impair 
efficiency  and  reduce  the  output  of  produc- 
tive activity,  and  that  prices  of  products 
shall  not  be  pushed  up  so  as  to  impair  the 
ability  of  consumers  to  buy,  and  thereby  to 


Fixing  \STag;es  and  Prices         73 

reduce  consumption.  Between  these  flexi- 
ble barriers,  dependent  for  their  stability 
upon  human  intelligence,  judgment,  and 
sense  of  right,  the  principle  of  competition 
is  supposed  to  have  free  play,  each  person 
striving  to  get  all  he  can  for  his  share  in 
return  for  what  he  does. 

Producers  and  consumers  are  often  re- 
ferred to  as  if  they  constituted  two  separate 
classes  with  opposing  interests  and  in  constant 
strife  with  each  other.  In  a  restricted  sense 
and  with  reference  to  particular  articles  of 
production  this  is  often  so,  but  in  a  broad 
sense  and  with  reference  to  the  whole  field 
of  supply  and  demand,  everybody  who  is  not 
a  drone  or  a  parasite  is  at  once  one  of  the 
producers  and  one  of  the  consumers,  with 
interests  common  to  both.  The  general 
level  of  wages  and  of  prices  concerns  every- 
body in  much  the  same  way,  but  in  a  dif- 
ferent degree  according  to  his  place  in  the 
whole  scheme.  What  he  gains  by  a  high 
level  of  income  may  be  offset  by  a  high  level  of 
outgo,  or  more  than  offset. 

Now  in  the  strife  of  competition  the 
strong  have  an  advantage  over  the  weak. 
There  are  all  degrees  of  strength  among  man- 
kind and  various  qualities  that  contribute 


74  Honest   Business 

to  strength  in  different  ways.  According 
to  the  doctrine  of  laissez-faire  and  the  sur- 
vival of  the  fittest,  the  proper  thing  is  to  let 
them  fight  it  out,  and  may  the  "best  man" 
win  and  the  devil  take  the  hindmost.  Let 
those  succeed  who  can  and  those  fail  who 
must.  It  is  the  business  of  each  to  help 
himself  and  not  of  all  to  help  each  other, 
according  to  capacities  and  needs.  Altruism, 
a  sense  of  equity,  even  generosity,  may 
enter  into  these  economic  relations,  but 
that  is  a  voluntary  and  individual  affair 
and  not  a  question  of  economic  principle  or 
a  matter  of  "science."  The  strong  may  be 
just  or  generous,  or  he  may  take  every  mean 
advantage.  That  is  between  him  and  his 
God  or  his  own  soul,  but  does  not  concern 
the  community  as  a  whole.  This  is  the 
theory;  but  it  does  concern  the  community, 
and  the  State  and  every  individual  who  is 
part  thereof.  It  concerns  the  welfare  of  peo- 
ple. It  concerns  the  true  wealth  of  nations. 

In  every  country,  whatever  its  institu- 
tions, its  government,  and  its  laws,  there 
are  great  numbers  of  people  of  limited  but 
varying  capacity,  in  strength  of  body  and  of 
mind,  and  of  different  opportunities  and 
advantages  in  making  their  start  in  life,  and 


Fixing  Wages  and  Prices         75 

in  making  progress  along  the  way.  The 
number  of  those  having  highest  capacity 
is  small,  and  mankind  might  be  represented 
as  a  pyramid  with  a  great  mass  of  the  in- 
dividually weak  at  the  bottom  and  a  small 
number  of  individually  powerful  at  the  top, 
with  every  gradation  between,  the  number 
diminishing  as  individual  capacity  increases. 
Collectively  the  power  may  be  at  the  bottom, 
where  it  is  latent  or  dormant;  and,  in  the 
case  of  a  pyramid  of  living  particles,  if  the 
base  once  gets  active  and  moves  together, 
the  structure  may  be  disturbed  with  much 
shifting  of  those  particles.  Taking  things 
as  they  have  long  been,  great  numbers  are 
at  the  bottom  of  the  pyramid  busily  working. 
They  have  to  work  to  live,  and  take  what 
they  can  get,  and  they  are  necessary  to  the 
support  of  those  who  are  higher  up  and  who 
get  more  light  and  air..  It  will  not  do  to  work 
the  pyramidal  figure  too  hard,  for  those  on 
the  higher  levels  work  too  and  are  necessary 
to  the  structure,  which  is  not  a  stolid  mass 
resting  upon  firm  ground. 

Suppose  there  is  unrestrained  competition 
among  the  great  mass  of  workers  in  the 
lowest  rank,  and  that  the  compensation  of 
each  is  to  be  determined  by  the  employer's 


76  Honest   Business 

estimate  of  its  value  to  him.  The  result  will 
be  many  always  on  the  verge  of  destitution 
and  some  within  its  borders  for  lack  of  em- 
ployment or  from  inability  to  earn  a  living. 
There  will  be  desperation  and  yielding  to  evil 
impulse  and  propensity.  Are  these  to  be 
ruthlessly  crushed  out  in  the  struggle  for  life, 
or  is  there  obligation  in  human  society  to  re- 
lieve the  pressure  ?  Cannot  employment  be  so 
adjusted  in  hours  and  wages  as  to  give  them 
a  chance  for  their  lives  with  some  little 
comfort,  if  there  is  sympathy  and  encourage- 
ment from  fellow  workers  and  employers, 
though  it  involve  some  sacrifice  of  self?  If 
not,  the  penalty  must  continue  to  afflict 
society  in  vice  and  crime  and  poverty,  which 
will  be  a  burden  and  a  source  of  loss  until 
there  is  some  care  for  the  weak  before  their 
state  is  desperate.  Is  there  not  reason  in  so 
organising  labour  that  care  shall  be  taken  of 
the  weak  and  the  burden  be  distributed ;  and 
shall  not  employers  and  society  in  general 
take  part  in  a  policy  of  uplifting  those  who 
need  help  in  the  struggle?  Among  workmen 
shall  the  strong  forever  strive  for  themselves 
alone  and  climb  up  by  treading  down  or 
kicking  out  the  weak?  Shall  employers  in 
competition  with  each  other  for  lowering 


Fixing  \Vages  and  Prices         77 

cost  crowd  labour  down  in  wages  to  the  limit 
of  subsistence  without  sacrifice  of  efficiency? 

As  a  rule,  it  is  the  comparatively  strong 
who  get  capital  and  employ  the  labour  of 
others.  The  rule  is  not  invariable,  for  often 
the  hireling  is  the  equal  or  the  superior  of 
him  who  hires,  but  the  latter  has  the  advan- 
tage of  a  position  which  is  inherited  or 
conferred  upon  him  by  favouring  circum- 
stances. The  employer  is  always  in  the 
stronger  position,  because  he  commands 
capital  and  the  opportunities  for  labour. 
He  is  not  dependent  upon  those  who  are 
working  for  him  for  daily  subsistence  or  for 
a  share  in  the  profits.  If  competition  has  full 
sway  he  may  hire  others  more  easily  than 
they  can  find  other  employers.  Is  it  right 
for  him  to  take  full  advantage  of  his  position 
to  keep  them  subservient,  though  not  satis- 
fied? Is  it  not  right  for  them  to  unite  their 
strength  and  make  it  equal  to  his  if  they  can? 
Is  it  not  right  for  other  workmen  to  unite 
in  helping  them  at  need  as  part  of  the  common 
cause  of  labour?  Shall  not  other  human 
qualities  besides  selfishness  enter  into  the 
bargain  by  which  wages  are  fixed? 

It  is  largely  competition  among  employers 
to  lower  cost  in  order  to  increase  profit  that 


78  Honest   Business 

fixes  the  level  of  wages,  and  the  well-disposed 
are  constrained  to  adopt  the  standard  of  the 
ill-disposed  in  order  to  "hold  their  own." 
As  another  means  of  increasing  profit  the 
capitalist  and  employer  seeks  to  put  up  the 
level  of  prices;  but  there  competition  tends 
to  keep  it  down.  The  seller  strives  to  get 
all  he  can  for  his  goods,  while  the  buyer  tries 
to  get  them  at  the  lowest  price.  Here  enters 
that  "higgling  of  the  market"  under  the 
"law  of  supply  and  demand,"  which  is  said 
by  the  economists  to  fix  prices  at  the  legiti- 
mate level.  This  is  plausible  in  theory  and 
within  certain  limits  is  sound  in  practice,  but 
competition  among  producers  and  traders 
has  another  aspect.  Here  again  is  a  strug- 
gle between  the  strong  and  the  weak.  The 
big  capitalist  and  large  employer  of  labour, 
with  great  ability  for  managing  and  direct- 
ing industrial  and  business  operations  may, 
by  economising  cost,  increasing  efficiency, 
and  gaining  a  wide  command  of  markets, 
acquire  such  advantage  over  those  of  smaller 
capacity  as  gradually  to  push  them  to  the 
wall.  Weaker  concerns  may  be  driven  into 
bankruptcy  and  pushed  out  of  the  field  of 
competition  or  may  be  so  hard  pressed  as 
to  find  refuge  in  being  absorbed. 


Fixing  Wages  and  Prices         79 

This  has  been  the  modern  tendency.  The 
result  of  unrestrained  competition  is  slowly 
to  destroy  competition,  the  strong  squeezing 
out  the  weak,  until  a  few  great  concerns  con- 
trol an  industry  and  are  in  a  position,  by  ally- 
ing themselves  together,  to  establish  a  virtual 
monopoly.  Then,  if  the  power  is  subject 
to  no  regulation  but  that  of  the  will  of  those 
who  wield  it,  it  may  within  uncertain  limits 
determine  the  wages  of  labour,  the  cost  of 
other  elements  of  production,  and  the  price 
of  products,  and  thereby  enlarge  the  margin 
of  profit  while  the  number  among  whom  the 
bulk  of  profits  is  divided  steadily  diminishes. 
The  result  is  to  increase  still  more  the  riches 
of  the  few  and  widen  the  differences  of  condi- 
tion among  the  people. 

There  is  but  one  natural  restraint  upon  this 
tendency  to  monopoly  and  that  is  a  constant 
struggle  to  revive  competition.  The  thousand 
sons  of  emulation  will  constantly  strive  and 
there  will  be  those  of  energy,  ambition,  and 
ability  to  seize  every  opportunity.  The 
greed  of  any  one  man,  or  group  of  men  or 
combination  of  groups  of  men,  to  control  a 
field  of  activity  and  gather  profit  for  them- 
selves, will  reach  a  limit  beyond  which  it 
ceases  to  be  effective.  Many  details  will 


8o  Honest   Business 

get  beyond  control.  The  mechanism  will 
become  too  complex  and  weakness  will  de- 
velop here  and  there  and  dominant  forces 
will  become  turbulent.  There  will  be  loss  of 
economy  and  efficiency  and  a  decline  in 
profits,  and  the  great  fabric  will  be  open  to 
renewed  attack  from  competition,  which 
will  have  its  way  for  a  while,  until  the  new 
upbuilding  is  followed  by  a  new  era  of 
slaughter.  These  cycles  may  be  natural 
incidents  of  development,  but  they  are 
costly  and  they  are  not  inevitable.  They 
mark  spasms  of  progress,  but  steady  progress 
is  more  desirable  for  mankind  than  progress 
by  spasms  of  warfare  and  destruction,  with 
intervals  of  recovery  and  new  growth. 

What  is  needed  for  healthy  growth  and 
steady  progress  is  co-operation  among  the 
forces  of  humanity  for  the  common  good,  as 
a  restraint  upon  competition  for  individual 
aggrandisement.  Instead  of  the  continual 
struggle  of  selfish  instincts,  the  use  of  every 
faculty  and  power  for  self -gratification  .Jfoere 
needs  to  be  emulation  for  the  gcneraTbenefit. 
Tills  is  not  mere  altruism  in  the  narrow  sense, 
a  sympathy  for  the  individual  fellow-being 
who  is  not  strong  or  capable  or  fortunate,  but 
a  rational  and  ethical  regard  for  the  well- 


Fixing  Wages  and  Prices         8 1 

being  of  the  great  economic  family,  the 
community,  the  state,  the  nation,  the  federa- 
tion of  mankind.  In  this  every  one  must 
share  and  to  this  every  one  should  contribute 
to  the  measure  of  his  capacity  and  oppor- 
tunity. The  policy  of  selfish  competition 
makes  some  rich  and  powerful  and  many 
poor  and  feeble.  It  causes  much  enjoyment 
and  more  suffering;  it  results  in  multiplying 
and  widening  the  difference  among  beings 
of  the  same  race  and  a  common  fatherhood. 
A  policy  of  co-operation  would  create  no  less 
wealth,  but  it  would  prevent  much  loss  and 
distribute  wealth  far  more  equitably.  This 
is  not  a  matter  of  cold-blooded  economics, 
taught  as  a  science;  but  it  is  a  matter  of 
sober  reason  and  sound  moral  sense,  applied 
by  the  enlightened  will  of  man,  for  the  good 
of  every  individual  as  well  as  the  common 
benefit  of  all.  How  is  it  to  be  applied?  Not 
by  outward  force  but  inward  development 
under  proper  teaching  and  discipline.  It  is 
a  doctrine  to  be  taught  in  the  family,  in  the 
school,  in  the  lyceum  and  in  the  church, 
until  the  ethical  element  shall  regenerate 
economic  theory,  and  make  men  work 
together  to  produce  and  distribute  the 
means  of  subsistence,  of  comfort  and  of 

6 


82  Honest  Business 

enjoyment,  equitably  and  for  the  good  of 
all,  and  not  scramble  and  fight  that  each 
may  get  all  he  can.  This  does  not  mean  that 
all  shall  share  alike,  for  all  do  not  contribute 
alike  to  the  store  that  is  to  be  apportioned; 
but  all  should  share  equitably,  in  proportion 
to  their  actual  contribution,  while  giving 
to  others  every  fair  opportunity  and  to  the 
weak  and  unfortunate  encouragement  and 
needed  help. 

This  may  be  called  a  matter  of  sentiment, 
an  old,  old  doctrine  of  ethics,  taught  for 
centuries,  professed  and  pretended  by  many, 
but  practised  by  few.  It  is  more  than  that. 
It  is  an  element  in  sound  economics  and  safe 
politics,  because  it  would  contribute  to 
practical  results  better  than  those  attained 
by  disregarding  it.  But  how  are  we  to  get 
it  applied?  By  teaching  and  preaching  it 
and  insisting  upon  its  application  on  every 
proper  occasion  and  by  enforcing  its  applica- 
tion by  authority  so  far  as  that  can  be 
successfully  done.  The  spirit  of  co-operation 
instead  of  conflict  should  prevail  in  the 
organisation  of  labour.  The  object  of  the 
organisation  should  not  be  the  benefit  of 
some  at  the  expense  of  others,  but  the  benefit 
of  all.  It  should  prevail  in  the  organisation 


Fixing  "Wages  and  Prices         83 

of  capital,  where  equity  and  fair  play  to  all 
should  be  the  rule,  and  not  advantage  for 
those  who  are  in  position  to  seize  it.  It 
should  prevail  in  the  relations  between 
capital  and  labour,  between  employers  and 
employed,  where  every  effort  should  be  made 
for  a  complete  understanding  of  the  rights 
and  claims  of  each  side  and  a  willingness  to 
concede  what  is  justly  due.  The  settlement 
of  these  relations  should  be  a  judicial  matter, 
and  not  the  result  of  a  test  of  power  to  injure 
or  to  endure  injury,  the  decision  to  be  in 
favour  of  the  side  that  can  wear  the  other 
out. 

The  power  to  apply  and  enforce  this 
doctrine  of  ethical  economics  is  the  same  that 
must  support  any  policy,  the  same  that 
establishes  law  and  maintains  government, 
the  power  of  public  opinion,  the  concentrated 
force  of  the  sentiment  of  the  community  or 
the  state  in  which  it  is  to  be  applied.  Public 
opinion,  or  "popular  sentiment,"  is  not  an 
emanation  from  the  mass  of  a  people,  pro- 
portioned to  their  number  and  proceeding 
with  equal  effect  from  all  its  members. 
There  is  as  much  inequality  in  begetting  and 
propagating  opinion  as  in  all  other  capacities. 
In  some  countries  it  proceeds  mainly  from 


84  Honest   Business 

the  few,  while  the  many,  ignorant  and  un- 
thinking, have  little  influence  upon  it.  In 
others  its  source  is  wider  and  more  varied, 
but  everywhere  it  is  a  blend  and  that  which 
predominates  is  determined  by  an  average 
force  and  direction.  It  is  not  a  wind  that 
bloweth  where  it  listeth,  but  a  force  that  can 
be  aroused,  trained,  and  directed.  Accord- 
ing to  its  power  and  direction  it  makes  and 
unmakes  government  and  laws  and  shapes 
policies  and  their  enforcement.  It  is  deter- 
mined by  the  intelligence  and  education  of  a 
people  and  the  character  of  the  men  who 
assume  leadership  and  command  in  the 
movements  of  a  time  or  are  chosen  to  take 
it.  The  motive  power  in  a  country  of  free 
institutions,  where  government  is  representa- 
tive and  rests  on  the  consent  of  the  governed, 
is  public  opinion,  and  through  that  every 
change  for  the  better  or  worse  is  wrought.  If 
sound  principles  are  to  be  applied  and  safe 
policies  carried  out,  it  must  be  through 
educating  and  directing  public  opinion  to 
desired  ends. 


VIII 

SOCIALISM  NO  REMEDY  FOR  INEQUITY 

IN  seeking  to  attain  the  standard  of  honesty 
in  all  business  dealings  and  relations,  the 
most  important,  and  perhaps  the  most 
difficult,  matter  is  to  determine  how  an 
equitable  division  of  the  fruits  of  labour, 
aided  by  the  instrumentalities  which  inven- 
tion, skill,  and  enterprise  have  devised,  is  to 
be  attained.  Here,  as  before,  we  mean  by 
labour  all  the  variety  of  human  effort  that  is 
applied  to  production  for  supplying  human 
wants,  labour  of  the  hands,  labour  with  tools 
and  machinery,  labour  of  the  mind,  the 
driving  force  of  energy  and  the  direction 
and  guidance  of  a  sense  of  right.  In  instru- 
mentalities of  labour  we  include  whatever  is 
provided  by  capital  in  land,  buildings,  and 
the  varied  appliances  of  industry,  and  the 
organised  methods  which  increase  efficiency 
and  conserve  economy. 

Among  the  methods  proposed  for  solving 
85 


86  Honest   Business 

the  problem  of  equity  in  apportioning  the 
fruits  of  labour  is  that  commonly  called 
"Socialism."  This  has  been  based  upon  a 
sort  of  aphorism:  "To  each  according  to 
his  needs,  from  each  according  to  his  ability." 
Natural  justice  says:  "To  each  according 
to  the  part  he  contributes  to  the  produc- 
tion of  the  fruits  to  be  divided."  That  is 
an  ethical  as  well  as  an  economic  principle. 
The  question  of  needs,  so  far  as  it  is  not 
thereby  met,  is  one  of  philanthropy  rather 
than  equity. 

What  are  needs?  They  vary  as  greatly 
as  ability  to  provide  for  them.  At  every 
step  we  encounter  the  inequality  and  diver- 
sity of  men.  There  is  the  need  of  bare 
subsistence.  Without  the  means  of  supply- 
ing this  men  cease  to  live.  There  is  the  need 
of  a  sustenance  which  will  maintain  the 
natural  efficiency  of  men  in  what  they  have  to 
do.  Without  the  means  of  keeping  this  up 
they  will  fail  to  do  their  full  share  of  the 
work  to  be  done,  and  the  fruits  of  labour  will 
be  impaired.  There  is  the  need  for  comfort 
in  life,  for  reasonable  and  wholesome  enjoy- 
ment, and  this  varies  with  temperament, 
with  capacities  for  enjoyment,  with  constitu- 
tion of  body  and  mind  derived  from  birth 


Socialism  No  Remedy  87 

and  heredity,  and  from  environment  and 
habit.  What  is  a  crying  need  to  one  is  a 
matter  of  indifference,  and  may  be  a  matter  of 
aversion,  to  another. 

Some  will  not  make  the  effort  to  supply 
more  than  the  urgent  wants  of  the  life  in  the 
midst  of  which  they  find  themselves.  Others 
will  strive  and  live  laborious  days  to  satisfy 
eager  cravings  of  their  nature.  Is  it  equity 
for  the  indolent,  the  indifferent,  the  thought- 
less, to  make  no  exertion  except  to  sustain  a 
miserable  existence,  while  the  active,  the 
ambitious,  the  energetic  provide  for  them 
comfort  or  enjoyment  for  which  they  will 
not  toil  and  which  they  hardly  appreciate? 
Is  it  well  to  encourage  the  careless  by  taking 
care  of  them?  We  speak  not  now  of  the  un- 
fortunate or  the  really  incapable.  All 
should  have  a  fair  chance  to  do  for  them- 
selves, but  none  should  have  that  done  for 
them  which  they  have  a  chance  to  do,  can 
do,  and  will  not  do.  A  doctrine  that  en- 
courages that  is  not  helpful  to  progress.  It 
will  not  elevate  humanity  or  improve  society, 
but  it  will  impair  the  general  prosperity, 
because  the  work  done  will  be  lessened  and 
the  fruits  of  labour  for  all  will  be  diminished. 

What  is  called  socialism  takes  many  forms, 


88  Honest   Business 

but  all  have  a  pernicious  quality  which 
would  weaken  efficiency  in  the  economic 
body  from  top  to  bottom  by  detracting  from 
the  incentive  to  exertion  of  the  less  capable 
by  relieving  them  of  necessity  through  the 
exertion  of  others.  It  would  lessen  the 
incentive  of  the  more  capable  by  depriving 
them  of  part  of  the  just  reward  for  their 
efforts.  The  total  result  would  be  less  of  the 
fruits  of  production  to  diffuse  for  the  sat- 
isfaction of  all  wants.  The  extreme  of 
socialism,  so  far  as  it  is  not  founded  in  sheer 
charity  or  the  obligation  of  the  strong  to 
take  care  of  the  weak  regardless  of  merit  or 
actual  necessity,  is  based  upon  the  fallacy 
of  human  equality,  equality  of  capacities 
and  equality  of  needs.  If  not  that,  it  is 
based  upon  gross  injustice.  It  assumes  that 
everything  is  produced  by  labour,  which 
with  a  proper  definition  of  labour  is  true. 
It  assumes  that  the  owners  of  capital  which 
has  been  produced  by  labour  and  belongs  to 
those  who  have  created  or  inherited  it,  and 
which  is  essential  to  the  further  employment 
of  labour  with  efficiency,  are  entitled  to  no 
share  in  the  proceeds  for  the  use  of  their 
capital,  though  without  it  production  on 
any  adequate  scale  would  be  impossible.  It 


Socialism  No  Remedy  89 

assumes  that  all  workmen,  as  it  defines 
workmen,  are  entitled  to  an  equal  share  in 
the  distribution  of  the  results  of  labour. 
Either  this  is  based  upon  the  assumption 
that  all  contribute  equally  to  production, 
which  is  not  true,  or  else  it  assumes  that  what 
some  have  produced  should  be  given  to 
others,  which  is  not  just. 

But  grant  that  this  theory  of  production 
and  distribution,  right  or  wrong,  could  be 
established  and  that  an  effort  were  made  to 
put  it  in  practice,  what  would  the  result  be? 
There  is  no  power  on  earth  that  could 
enforce  the  practice,  and  the  power  on  high 
has  so  ordained  the  forces  of  nature  and  of 
man  that  it  would  not  work.  No  human 
power  could  efface  the  differences  in  men  and 
no  divine  power  would  efface  them.  They 
would  immediately  assert  themselves  and 
overthrow  the  system  based  upon  assumption 
of  an  equality  that  does  not  exist.  Start 
with  an  equal  division  of  existing  property. 
Proceed  on  the  theory  that  the  work  of  each 
is  equally  important  in  carrying  on  industries 
and  distributing  their  products,  and  that  each 
is  therefore  entitled  to  an  equal  share  in  the 
proceeds.  Watch  with  the  mind's  eye  for 
the  results.  As  everybody  knows,  in  spite 


90  Honest   Business 

of  the  assumption  to  the  contrary,  there 
are  vast  and  varied  differences  in  men. 

It  must  be  clear  to  the  humblest  reasoning 
capacity  and  the  dullest  imagination,  that 
the  existing  system  would  speedily  go  to 
wreck  unless  the  strong  and  capable  immedi- 
ately united  to  rescue  it  and  keep  it  going. 
If  they  seized  it  in  time,  it  would  not  be  long 
before  they  began  to  recover  their  places 
and  regain  their  property,  until  inequality 
reigned  again,  and  in  saving  themselves  they 
would  save  the  weak  from  the  ruin  they  were 
bringing  upon  themselves  as  well  as  others. 
If  the  experiment  went  far  enough  to  produce 
the  anarchy  which  would  be  inevitable 
unless  averted,  the  same  strong  men  would 
have  to  rebuild  from  the  wreck  until  the 
system  based  upon  inequality  was  estab- 
lished again.  There  could  be  no  other 
system,  since  me'n  have  been  created  unequal 
and  will  continue  to  be  so.  But  where  there 
is  inequality  there  is  the  greater  need  of 
applying  and  enforcing  the  principle  of 
equity  and  seeing  that  every  man  has  an 
equal  chance  according  to  his  capacity  and 
receives  a  reward  according  to  his  deserts  as 
a  producer. 

The  socialism  that  would  effect  an  equal 


Socialism  No  Remedy  91 

distribution  by  some  sort  of  voluntary 
association  of  workers  to  eliminate  the 
capitalist  and  the  "employing  class,"  and 
take  possession  of  industries  and  of  property, 
means  anarchy  and  is  a  futile  dream.  No 
less  futile  is  what  is  called  State  socialism, 
which  would  have  governments  take  posses- 
sion and  direct  industries  and  trade.  While 
there  are  strong  and  resourceful  men  in 
possession  and  others  striving  to  do  their 
part  and  eager  to  get  their  full  share,  it  will 
be  impossible  to  establish  any  such  system, 
however  great  the  multitude  that  may 
demand  it.  The  multitude  may  be  led  by 
visionaries,  but  it  will  be  like  a  numerous 
army  without  effective  organisation,  without 
capable  commanders,  without  the  rank  and 
precedence  that  enables  each  to  do  the  part 
for  which  he  is  best  fitted  and  to  which  he 
has  been  trained  and  disciplined.  It  would 
move  against  a  solid  and  intrenched  phalanx 
defending  its  stronghold  and  its  heritage, 
and  would  be  broken  and  scattered.  It 
might  do  much  harm  and  cause  a  wide- 
spread ruin,  but  it  could  not  get  control  of 
government. 

But,  for  the  sake  of  argument,  suppose  it 
did,  and  got  possession  of  land  and  buildings 


92  Honest   Business 

and  all  the  instrumentalities  of  industry  and 
interchange,  as  government  property  to  be 
used  for  the  general  benefit,  on  the  presump- 
tion of  equality  of  needs  and  the  right  to 
have  them  satisfied.  Suppose  we  had  the 
social  state  after  the  manner  of  the  dreamers. 
What  would  happen?  Would  it  make  men 
equal?  Would  it  make  the  incapable  capa- 
ble, the  indolent  and  wasteful  industrious 
and  thrifty,  the  vicious  virtuous,  the  lazy 
and  indifferent  energetic  and  ambitious? 
Would  it  abolish  poverty  by  eliminating 

•••^ .^^^^^^•^•^^^•^^—^.^•^•^^^^••^^^^^^^^••^^^^^^J^^ 

its  causes  arid  destroy  riches  by  taking  away 
the  motives  and  incentives  for  it? 

"Not  even  far  from  it,"  to  use  the  hyper- 
bole of  the  Greek  orator.  If  such  a  system 
of  socialistic  government  could  be  estab- 
lished, with  its  many  functions  of  organisation 
and  management,  its  provision  of  employ- 
ment for  all  its  subjects,  and  its  direction  of 
the  processes  of  production  and  interchange 
and  the  apportionment  of  the  proceeds,  it 
would  become  instantly  unworkable.  The 
strong  and  capable  would  have  to  take  control, 
and  men  would  have  to  be  assigned  to  duties 
according  to  capacity  and  fitness,  or  the 
system  would  speedily  go  to  pieces  and  bring 
a  state  of  anarchy  from  which  government 


Socialism  No  Remedy  93 

would  have  to  be  rebuilt  upon  rational 
principles.  The  selfish  motives  of  human 
nature  would  work  as  before,  the  motives 
of  ambition  and  greed,  of  restless  energy 
and  adventure,  of  desire  to  get  more  than 
was  earned,  and  the  motives  of  sloth,  of 
vicious  indulgence,  and  the  desire  to  be  sup- 
ported by  the  efforts  of  others.  There 
would  be  economic  ruin  as  well  as  the 
destruction  of  all  rule,  and  again  the  strong 
and  capable  would  have  to  take  control  and 
reorganise  industry  and  trade  as  well  as 
re-establish  government. 

State  socialism  is  a  disordered  dream  of 
the  ignorant  and  unthinking,  or  a  vision  of 
impracticable  idealists  who  lack  "discourse 
of  reason";  and  it  can  never  appeal  to  that 
saving  common-sense  which  is  the  fortunate 
gift  of  those  who  have  well-balanced  faculties 
however  much  the  faculties  may  differ  in 
power  and  activity.  Agitation  on  the  lines 
of  socialism  will  never  cease  until  all  human 
nature  becomes  well-balanced  and  reason 
holds  its  seat  in  all  minds  except  those  which 
will  be  recognised  and  treated  as  disordered. 
It  serves  a  purpose  and  is  an  active  force  for 
human  progress  though  it  is  mistaken  both 
in  its  end  and  in  the  means  of  promoting  it. 


94  Honest  Business 

It  seeks  to  attain  the  unattainable,  but  it 
may  work  in  the  direction  of  the  attainable 
and  the  desirable.  It  aims  at  equality.  It 
may  help  to  reach  equity,  or  a  nearer  or 
more  speedy  approach  to  it  than  conserva- 
tism and  tradition  would  permit  without  its 
restless  and  disturbing  activity. 
"  There  is  here  as  in  all  economic  striving. — 
the  striving  to  make  a  living  and,the  striy- 
ing  to  "make  money"  or  get  wealth, — a  de- 
ficiency of  the  ethical  motive  and  of  moral 
sense.  It  is  these  which  chiefly  need  to  be 
stimulated  and  developed  to  correct  the  evils 
of  the  existing  system.  The  human  selfish- 
ness which  has  its  source  in  the  physical 
constitution  of  man,  its  passions  and  desires, 
which  spring  from  the  instinct  to  preserve 
and  prolong  life  and  to  propagate  and  perpet- 
uate it,  is  essentially  unmoral,  and  it  needs 
to  be  contr6ITed~by  the  spiritual  nature, 
\vhich  is  the  source  of  moral  sense,  ethical 
conviction,  and  of  care  for  the  well-being 
of  others.  Selfishness  is  the  mainspring  of 
human  action.  It  needs  to  be  tempered  and 
controlled.  It  may  be  gross  and  blind  as 
that  of  the  beast.  It  may  be  refined  and 
enlightened  until  it  finds  more  satisfaction 
_  in  doing  good  to  others  and  conferring  benefit 


Socialism  No  Remedy  95 

upon  all  than  in  gratifying  the  desires  that 
spring  from  the  physical  nature.  It  may 
find  more  joy  in  ministering  to  the  intuitive 
longings  of  the  soul  than  can  be  derived 
from  any  indulgence  of  the  instinctive  needs 
of  the  body. 

The  guiding  star  of  the  socialist  is  as  much 
selfishness  as  that  of  the  seekers  for  wealth 
who  make  gain  from  the  toil  and  pain  of 
others  without  granting  them  the  meed  of  a 
fair  share  in  the  fruits  of  labour.  These 
latter  take  advantage  of  position  and  power 
in  the  economic  world  to  get  more  than 
justly  belongs  to  them.  This  it  is  that 
causes  warfare  for  a  more  equitable  division 
and  excites  wrath  in  those  who  feel  that  they 
are  deprived  of  their  birthright  and  robbed 
of  some  part  of  their  natural  heritage  in  the 
work  of  their  hands.  The  sense  of  wrong  is 
not  without  reason,  but  the  demand  for 
right  may  go  beyond  reason.  The  socialist 
who  would  take  away  the  property  of  the 
capitalist  or  deprive  it  of  value  for  him  by 
leaving  him  no  profit  from  its  use;  or  who 
would  not  allow  to  the  employer,  whose 
investment  in  capital  and  whose  ability  and 
experience  in  management  multiply  the 
production  from  labour  far  beyond  what  it 


96  Honest  Business 

would  otherwise  be  for  the  same  workers,  a 
commensurate  share  in  the  return  from 
production,  is  no  less  a  thief  and  a  robber  in 
his  intent  than  the  "predatory  rich."  He 
seeks  for  those  whom  he  professes  to  guide 
more  than  they  are  entitled  to,  and  would 
convey  to  them  without  proper  considera- 
tion a  part  of  what  by  right  and  equity 
belongs  to  others.  He  preaches  a  doctrine 
of  selfishness  as  perverted  in  morals,  if  not  as 
sordid  in  nature,  as  that  of  the  unscrupulous 
among  employers. 

We  will  admit  that  there  may  be  honest 
differences  of  opinion  as  to  what  constitutes 
an  equitable  division  of  the  proceeds  of 
labour  and  capital  working  together,  or, 
more  strictly  speaking,  of  labour  of  hand  and 
brain  working  together  with  the  use  of  capital, 
and  difficulty  in  determining  a  just  apportion- 
ment. We  are  sure  it  cannot  be  fairly 
determined  by  unrestrained  competition  on 
either  side,  the  competition  of  labour  for 
work  to  do  or  the  competition  of  employers 
for  the  labour  available.  There  is  need  of 
organisation  on  both  sides  and  of  co-opera- 
tion between  them  to  determine  fairly  what 
each  is  entitled  to.  If  it  cannot  be  accom- 
plished by  agreement  with  a  mutual  convic- 


Socialism  No  Remedy  97 

tion  of  what  is  just  and  right,  there  should  be 
an  impartial  tribunal  to  pass  upon  their 
conflicting  claims.  Before  considering  this 
question  further  it  may  be  well  to  give 
attention  to  the  subject  of  organisation  of 
labour  and  organisation  of  capital;  but 
socialism  as  a  means  of  solving  the  economic 
problem  may  as  well  be  dismissed  as  futile. 

7 


IX 

HONESTY    IN    LABOUR    UNIONISM 

IN  these  times  of  organised  effort  in  various 
lines  there  is  especial  need  of  an  awaken- 
ing moral  sense  and  the  application  of  ethical 
principles  to  associated  action.  Men  who  in 
their  individual  capacity  and  their  personal 
relations  scorn  to  use  deceit  or  misrepresenta- 
tion, to  take  unfair  advantage  or  resort  to 
force  to  gain  their  ends,  will  often  counten- 
ance, defend,  or  directly  advocate  such  means 
when  associated  together  to  accomplish  a 
common  purpose,  or  to  advance  what  they 
consider  an  important  "cause."  When 
uniting  and  arraying  their  forces  to  overcome 
opposition  or  resistance,  the  spirit  of  warfare 
arises  in  them,  and  nothing  so  demoralises 
all  standards  of  human  conduct  as  war. 

In  dealing  with  a  foe,  moral  sense  vanishes 

and  principles  of  right  have  no  place.     The 

enemy  may  be  deceived  and  tricked,  robbed, 

hunted  down,  and  slaughtered.     That  belongs 

98 


Honesty  in  Labour  Unionism      99 

to  the  field  of  strategy.  But  the  purpose 
of  war  is  destruction,  while  that  of  peace  is 
production  and  enjoyment  of  its  fruits. 
Those  engaged  in  it  are  necessary  partners 
and  sharers  in  those  fruits.  Those  who 
supply  capital  and  those  who  supply  labour 
may  have  good  reason  for  organising  their 
forces,  but  not  for  fighting  each  other.  To 
treat  each  other  as  foes  and  engage  in  war- 
fare is  the  height  of  folly,  for  that  means 
injury  and  destruction.  It  is  as  sensible 
as  for  the  individual  and  his  hired  men  to 
quarrel  and  fight  in  the  field  or  the  shop. 
These  productive  forces  will  always  find 
their  advantage  in  dealing  amicably  with 
each  other  and  that  necessarily  means  fairly 
and  honestly. 

The  term  "workingmen"  is  commonly 
applied  to  those  who  work  for  others,  who 
are  hired  and  paid  in  "wages."  Those  who 
are  hired  and  paid  in  "salaries"  also  work. 
Their  labour  may  be  of  a  different  kind,  less 
manual  or  mechanical  and  more  mental. 
Usually  it  brings  them  more  in  contact  with 
the  employer,  but  the  economic  relation  is  no 
different  from  that  of  the  "wage-earners." 
They  are  often  no  better  paid  and  no  better 
treated  and  their  position  is  equally  depeu- 


loo  Honest   Business 

dent.  The  capitalists  and  employers  work 
and  their  labour  is  as  essential  as  any  other. 
It  usually  has  a  high  value  and  is  entitled  to 
large  reward,  for  without  it  the  "workmen" 
would  have  less  to  do,  would  earn  less  and  be 
worse  off;  but  the  capitalist  employer  has 
control  of  his  own  compensation,  and  if 
successful  is  apt,  like  the  hired  workman,  to 
take  all  he  can  get.  The  radical  difference 
lies  in  the  power  to  get,  and  there  the  advan- 
tage is  all  on  one  side,  unless  the  hired  men 
join  forces  to  assert  and  maintain  what  they 
deem  to  be  their  rights. 

There  is  no  sound  argument  against 
"organised  labour."  Workingmen  not  only 
have  the  right  to  organise,  but  it  is  a  necessity 
if  they  are  to  assert  and  maintain  the  right 
to  a  fair  share  in  the  fruits  of  labour.  They 
must  have  power  to  bargain  for  their  labour, 
and  without  union  there  is  no  strength  for 
bargaining  The  individual  is  helpless  in 
the  struggle.  Free  competition  in  "making 
a  living"  and  free  competition  in  "mukirg 
money"  means  a  slate-  of  absolute  drpmd- 
enoe  of  the  weaker  upon  the  stronger,  a 


extremes  of  wealth  and  poverty,  with  power 
and  rule  in  the  hands  of  the  few,  and  in  the 


Honesty  in  Labour  Unionism  101 

end  it  means  ruin  of  the  common  weal. 
Union  and  co-operation  of  labour  is  necessary 
not  only  to  the  salvation  of  the  workingmen, 
with  the  rights  of  manhood,  but  to  the  salva- 
tion of  the  political  and  social  state  founded 
upon  the  rights  of  man. 

But,  it  implies  a  responsibility  for  which 
workingmen  in  the  mass  are  ill-prepared 
and  for  which  the  sympathy  and  support  of 
the  more  enlightened  and  the  more  favoured 
are  greatly  needed.  Let  us  never  lose  sight 
of  the  inequality  of  men.  Let  us  remember 
that  on  the  whole  the  many  are  individually 
inferior  in  capacity  to  the  more  favoured 
few,  favoured  by  nature  and  by  circumstance. 
Power  increases,  not  so  much  with  numbers 
as  with  individual  capacity,  and  where 
selfish  instincts  have  free  play  a  small 
minority  arrayed  together  may  be  too  much 
for  a  large  majority  disunited. 

There  must  be  an  arraying  together  of  the 
unselfish,  or  those  with  a  high  ethical  stan- 
dard and  a  spirit  of  altruism  to  preserve  the 
equilibrium  of  safety.  Wisdom  and  prudence 
and  integrity  of  purpose  must  rule  in  the 
union  of  labour,  and  not  ignorance,  reckless- 
ness, and  brutality,  if  it  is  to  serve  its  purpose. 
These  qualities  reside  in  "workingmen"  no 


IO2  Honest   Business 

less  than  in  those  who  are  not  in  their  ranks, 
but  they  need  to  be  reinforced  from  without 
and  made  to  prevail.  The  really  enlight- 
ened, conscientious,  and  reasonably  unselfish 
among  employers  will  be  on  their  side  if  a 
fair  chance  for  it  is  afforded. 

But  many  have  been  the  mistakes  in  the 
conduct  of  labour  unions.  Perhaps  these 
have  been  no  more  serious,  while  they  are 
more  excusable,  than  mistakes  of  employers 
in  dealing  with  labour.  In  treating  of  right 
purposes  and  methods,  it  is  not  necessary  to 
be  too  severe  upon  the  mistakes  to  which 
human  nature  is  all  the  time  subject.  It  is  a 
mistake,  for  instance,  for  workmen,  banded 
together,  to  impair  their  own  efficiency  or  the 
productivity  of  labour,  whether  of  the 
individual  or  of  the  whole.  Plainly,  if  by 
division  of  labour,  the  use  of  machinery 
and  improved  methods,  the  organisation  of 
capital  and  the  most  skilful  and  effective 
management,  production  is  increased,  there 
will  be  so  much  the  more  for  supplying  human 
wants,  in  proportion  to  the  number  whose 
wants  are  to  be  supplied ;  there  will  be  an 
increase  of  the  common  wealth  and  should  be 
an  increase  in  the  general  welfare.  It  is  only 
a  question  of  just  distribution  of  the  fruits. 


Honesty  in  Labour  Unionism  103 

Those  who  devise  and  execute  improve- 
ments in  appliances  and  methods;  those  who 
supply  capital,  ability,  and  energy  in  carrying 
them  into  effect,  are  entitled  to  their  reward, 
but  they  could  accomplish  nothing  without 
the  labour  of  the  many  workmen  employed, 
and  these  should  share  the  benefit  fairly  with 
them.  At  first,  when  any  important  indus- 
trial change  for  larger  production  is  made, 
fewer  men  may  be  employed  in  the  particular 
industry  affected,  because  the  demand  for 
its  products  does  not  at  once  come  up  to  the 
increased  capacity  for  supplying  them.  Unless 
the  time  of  labour  is  materially  diminished, 
the  number  employed  will  have  to  be  reduced ; 
and  if  the  time  of  labour  is  so  far  diminished 
as  to  restrict  the  legitimate  increase  of  out- 
put, the  benefit  of  multiplying  and  cheapen- 
ing production  will  be  lost.  There  will  have 
to  be  a  process  of  adjustment  during  which 
some  labour  will  be  dispensed  with  to  seek 
employment  elsewhere,  which  is  a  hardship 
and  should  be  treated  with  the  utmost 
consideration.  There  should  be  a  shortening 
of  hours  and  an  increase  of  wages  as  well  as  a 
cutting  down  of  working  force,  and  those  who 
"have  the  power"  should  not  take  all  the 
benefit  of  improvement.  In  the  course  of 


IO4  Honest   Business 

time  the  demand  for  products  will  rise  to 
meet  the  enlarged  supply  at  the  reduced 
cost.  More  efficient  and  productive  methods 
in  one  industry  will  give  a  new  impulse  to 
others  through  larger  output  and  lessened 
cost  and  in  the  end  the  number  of  persons 
employed  will  not  be  diminished.  To  some 
extent  they  will  get  shorter  hours,  higher 
pay,  and  better  conditions,  but  they  will  not 
get  all  that  they  are  fairly  entitled  to  without 
a  struggle,  on  account  of  the  propensity  of 
those  to  take  who  have  the  power  and  those 
to  keep  who  can. 

Notwithstanding  the  hardships  attending 
the  introduction  of  greater  division  of  labour 
and  more  improved  devices  and  methods  for 
multiplying  the  products  of  labour,  and  the 
difficulty  of  securing  a  fair  distribution  of  the 
results  so  as  to  give  the  workmen  their  fair 
share,  it  is  a  mistake  to  try  by  combination 
to  limit  production  so  that  there  shall  not 
be  so  much  to  distribute.  There  is  nothing 
to  be  gained  by  that.  Whatever  keeps 
production  below  its  normal  measure  is 
a  loss  to  labour  as  well  as  to  capital.  Work- 
men in  any  industry  who  by  agreement 
limit  the  output  of  work  per  man  with  the 
idea  that  there  is  gain  in  it  by  securing  em- 


Honesty  in  Labour  Unionism  105 

ployment  for  a  larger  number  of  men,  or 
keeping  up  wages  by  restricting  the  supply 
of  products  and  thereby  keeping  up  prices,  are 
labouring  under  a  delusion.  There  is  no 
benefit  in  preventing  products  from  being 
plentiful  and  cheap  for  the  buyer  and  con- 
sumer, who  are  at  the  same  time  among  the 
producers  and  sellers.  More  men  are  not 
employed  as  the  result,  but  fewer.  If  wages 
are  kept  higher  in  the  figures  of  weekly 
payment,  they  are  made  lower  in  what  thei 
wnTpurchase  to  satisfy~cIaTly  wants.  It  is  an 
injury  to  any  man  to  keep  down  his  efficiency 
as  a  producer,  and  it  is  an  injury  to  all  to 
keep  the  net  production  less  than  it  might  be. 
The  idea  that  anything  is  to  be  gained  by  it 
is  one  of  the  common  errors  of  labour  organ- 
isations. 

Another  serious  mistake  is  the  attempt  to 
keep  men  of  varying  capacity  on  the  same 
level  of  efficiency  and  to  prevent  one  from 
doing  more  work,  or  better  work,  and  getting 
more  pay  than  another  in  the  same  time. 
While  men  are  unequal  in  capacity  they  have 
an  equal  right  to  make  the  most  of  such  capa- 
city as  they  have,  and  they  should  have 
the  opportunity.  Men  in  every  station 
ought  to  be  encouraged  to  do  their  best, 


106  Honest    Business 

and  ought  to  be  rewarded  according  to  what 
they  do.  This  is  as  true  of  labourers  as  of 
professional  men,  clerks,  traders,  or  any 
class  of  business  men.  Every  man  should 
be  allowed  to  do  the  best  he  can  for  himself 
and  those  who  depend  upon  him,  to  have 
the  incentive  for  bettering  himself,  and  the 
chance  to  rise  in  the  world  as  far  as  his  capa- 
city will  enable  him.  To  keep  any  back  lest 
they  do  more  or  better  work  and  get  better 
pay  than  others  of  less  capacity  or  less 
industry  and  ambition  is  a  wrong  to  them 
and  an  injury  to  the  community.  Having 
fixed  wages  per  hour  or  per  day  or  week  in  any 
trade,  the  same  for  all,  irrespective  of  capa- 
city or  disposition  to  work,  and  having  these 
set  either  to  the  lowest  or  a  supposed  average 
capacity,  and  then  striving  to  keep  the  work 
of  all  down  to  a  standard  corresponding  to 
the  wages  agreed  upon,  is  the  worst  kind  of 
error.  It  is  based  upon  a  false  notion  of  an 
equality  of  right  and  works  rank  injustice  to 
the  individual  for  the  supposed  benefit  of  the 
mass,  which  in  reality  is  injured  thereby.  To 
the  industrial  community  and  to  society  at 
large  it  is  a  gross  wrong. 

We  are  looking  at  this  from  the  point  of 
view  of  a  land  of  supposed  free  institutions, 


Honesty  in  Labour  Unionism  107 

equal  rights,  and  popular  government.  The 
labour  union  policy  of  uniform  wages  in  any 
trade  or  employment  and  uniform  work  in 
earning  the  wages  is  the  offspring  of  the 
caste  idea  and  its  effect  is  to  perpetuate  that 
idea.  It  assumes  that  workingmen,  "wage- 
earners,"  constitute  a  class  into  which  they 
are  born  and  in  which  they  must  live  and  die. 
They  are  segregated  from  other  "classes" 
in  a  social  scale  and  must  know  their  place 
and  keep  it.  It  recognises  an  aristocracy, 
which  may  degenerate  into  plutocracy,  and  a 
proletariat,  whose  chief  function  is  to  breed 
workmen  and  spend  their  lives  in  toil  to  fur- 
nish supplies  for  those  upon  whom  they  are 
dependent.  It  has  an  element  in  it  of  slavery, 
of  serfdom,  of  feudalism.  It  is  unfit  for 
the  people  of  a  free  country.  There  men 
should  have  an  equal  chance  to  benefit 
from  their  inequality,  to  do  the  best  they  can 
and  win  reward,  or  "get  paid,"  accordingly. 
They  should  have  a  chance  to  rise,  to  get  on, 
and  to  help  others  to  get  on,  and  not  be  kept 
down  and  made  to  help  in  keeping  others 
down. 

The  chief  purpose  of  organised  labour 
should  be  to  improve  the  condition  of  work- 
ingmen,  not  by  striving  to  get  the  best  wages 


io8  Honest   Business 

for  the  least  or  the  poorest  work,  but  by 
making  labour  worth  as  much  as  possible  in 
production  and  trying  to  get  for  it  what  it  is 
worth  in  real  value.  It  should  endeavour  to 
make  workmen  more  efficient,  more  indus- 
trious, more  faithful  to  a  sense  of  duty,  more 
sober  and  self-respecting,  and  better  citizens. 
It  should  try  to  lift  up  the  less  capable, 
and  not  to  pull  down  the  more  capable.  Its 
arrangements  for  mutual  aid  in  case  of 
accident,  sickness,  loss  of  employment,  or 
other  misfortune  are  commendable  and 
worthy  of  co-operation  and  of  aid  from  em- 
ployers and  others  in  sympathy  with  them, 
but  the  funds  collected  for  these  purposes 
should  not  be  diverted  to  contests  for  injur- 
ing industry. 

Apart  from  the  fundamental  mistakes  al- 
ready mentioned  are  others  that  are  inci- 
dental, but  a  hindrance  to  the  essential  purpose 
of  labour  unions.  Workmen,  like  other 
citizens  of  a  free  commonwealth  politically 
organised,  are  bound  to  respect  the  rights, 
not  only  of  each  other,  but  of  those  in  other 
employments;  to  observe  the  law  and  sub- 
mit to  the  authority  of  a  system  of  govern- 
ment which  derives  its  just  powers  from  the 
consent  of  the  governed,  of  whom  they  are 


Honesty  in  Labour  Unionism  109 

a,  large  part,  and  which  depends  upon  their 
support  for  its  perpetuity.  Those  who  or- 
ganise industrial  trades  into  unions,  and  af- 
filiate unions  with  each  other  for  greater 
strength,  are  naturally  desirous  of  making 
their  membership  as  complete  as  possible; 
but  if  they  are  to  retain  vitality  and  accom- 
plish their  purpose  without  violating  essential 
principles  of  human  freedom,  membership 
must  be  voluntary.  There  may  be  appeal  and 
persuasion,  but  there  must  not  be  coercion, 
intimidation,  or  compulsion.  These  will  sow 
the  seeds  of  strife  and  defeat.  The  non- 
union man  has  the  same  right  to  life,  liberty, 
and  the  pursuit  of  happiness  as  the  union 
man,  and  he  must  be  allowed  to  "make  a 
living"  in  his  chosen  occupation  as  freely  as 
another.  Persecution  of  him  will  serve  no 
good  cause. 

Labour  unions  should  be  so  constituted 
and  managed  and  become  such  a  benefit  to 
workingmen  as  to  attract  the  competent  and 
gain  their  willing  adhesion.  Then  there  need 
be  no  fear  of  the  competition  of  those  who 
refuse  to  join.  They  would  win  the  sym- 
pathy of  the  disinterested  public  and  the 
confidence  of  employers,  and  union  labour 
would  be  preferred  because  more  valuable. 


no  Honest   Business 

But  for  this  union  regulations  must  have  in 
view  the  securing  of  efficiency  and  fidelity  to 
obligation,  as  well  as  mutual  support.  The 
management  of  unions  will  require  knowledge 
of  economic  principles,  administrative  ability, 
and  a  sense  of  fairness.  They  must  be  able 
to  make  bargains  that  are  businesslike,  and 
carry  them  out  in  good  faith.  That  requires 
the  same  kind  of  qualification  and  character 
on  the  side  of  the  employers,  but  there  is  no 
reason  in  the  nature  of  things  why  bargaining 
should  not  be  as  honourable  and  as  mutually 
satisfactory  between  those  who  require  labour 
and  those  who  supply  it  as  between  those 
who  contract  with  each  other  in  buying  and 
selling  commodities  or  in  providing  facilities 
for  their  production  and  exchange.  The 
chief  difference  has  always  lain  in  the  advan- 
tages of  the  parties  to  the  bargain.  In  dealing 
with  labour  the  employer  has  had  the  position 
of  advantage  and  has  used  it  selfishly,  often 
unjustly,  sometimes  outrageously.  He  should 
be  brought  to  a  position  of  using  it  fairly 
and  of  having  no  advantage  of  position. 
Parties  to  a  bargain  should  be  on  an  equal 
footing  so  far  as  making  and  enforcing  terms 
is  concerned. 

The  great  difficulty  here  lies  in  the  fact 


Honesty  in  Labour  Unionism    III 

that  the  advantage  of  the  employer  has  long 
existed,  that  it  is  based  largely  upon  posses- 
sion and  is  tenaciously  held,  and  that  human 
selfishness  is  the  controlling  motive  of  action. 
There  is  much  controversy  as  to  whether  the 
normal  relation  of  capital  and  labour  is  that 
of  hostile  rivalry  for  the  division  of  the 
results  of  their  joint  employment  or  that  of 
amicable  co-operation  and  mutual  benefit. 
It  has  been  chiefly  the  former  because  the 
owners  of  capital  have  striven  for  the  lion's 
share  of  the  fruits  of  production ;  and  labour,  as 
it  has  come  more  and  more  to  appreciate  the 
rights  and  equities  of  the  case,  has  fought  for 
a  fairer  division.  Strife  and  fighting  imply 
and  beget  hostility. 

The  relation  should  be  one  of  co-operation, 
for  if  labour  and  capital  were  to  work  together 
amicably  and  efficiently  and  on  terms  of 
mutual  benefit,  there  would  be  a  larger  pro- 
duct to  distribute;  and  though  under  the 
fairer  division  which  equity  would  dictate 
some  might  not  get  so  much  wealth,  there 
would  be  far  greater  equality  of  condition  and 
that  would  be  for  the  general  well-being. 
Even  the  rich  would  be  "better  off"  in  the 
true  sense  of  the  term.  The  doctrine  that 
there  should  be  an  equal  division,  or  a  division 


112  Honest   Business 

according  to  need  and  not  according  to  merit 
or  value  of  service,  is  delusive.  It  is  not 
founded  in  justice,  and  if  put  into  practical 
effect  would  paralyse  the  strongest  incentives 
to  industrial  effort.  The  resulting  equality 
would  be  a  degraded  state  of  general  poverty. 
Fortunately  the  innate  impulses  of  human 
nature  make  its  practice  impossible. 

Labour  organisation  should  seek  by  all 
means  to  make  labour  more  efficient  and  work- 
men more  capable  and  discard  every  rule  or 
"principle"  in  conflict  with  that  idea.  It 
should  allow  freedom  in  apprenticeship  and 
training  for  industrial  trades,  leaving  the 
distribution  of  employments  to  the  law  of 
supply  and  demand  for  their  labour  and  the 
capacity  of  the  workers.  It  should  favour 
the  best  mental  and  manual  training  and  the 
highest  ethical  discipline  of  its  members. 
Then  it  should  strive  by  every  fair  and 
honourable  means  for  an  equitable  division 
of  the  fruits  of  the  co-operation  of  labour  and 
capital  in  production.  Literally  speaking, 
labour  and  capital  cannot  co-operate,  but 
both  are  instrumentalities  controlled  by  men 
who  do  the  co-operating.  Men  own  and 
apply  and  direct  capital,  but  capital  is  impo- 
tent without  labour.  Men  have  a  capacity 


Honesty  in  Labour  Unionism    113 

for  furnishing  the  needed  labour,  but  in 
modern  conditions  labour  is  virtually  help- 
less without  the  opportunities  offered  by 
possessors  of  capital.  Each  is  necessary  to 
the  other  for  the  creation  of  a  state  of  well- 
being  for  the  possessors  of  both,  who  make  up 
human  society.  It  is  not  right  that  the 
possessors  of  one  should  dictate  the  terms 
and  award  the  compensation  for  both. 

Hence  the  need  of  organising  labour  and 
giving  it  the  power  for  effective  bargaining 
for  its  services.  That  power  needs  only  to 
be  used  intelligently,  honestly,  and  justly  to 
achieve  its  purpose  of  benefiting  labour,  or 
the  general  body  of  workingmen,  without 
injuring  capital,  or  those  who  employ  work- 
ingmen. It  will  thereby  promote  a  more 
perfect  union  of  labour,  win  the  sym- 
pathy and  support  of  those  not  directly 
concerned  in  the  disputes  or  conflicts  that 
are  liable  to  arise,  and  make  easier  and 
more  successful  the  efforts  at  establish- 
ing amicable  and  mutually  beneficial  rela- 
tions between  those  who  supply  capital 
and  direction  for  industries  and  those  who 
furnish  the  labour  necessary  to  make  these 
effective.  Labour  and  capital  must  work 
together  in  order  to  attain  fruitful  results 


114  Honest   Business 

and  their  equitable  distribution.  The  more 
amicably  and  fairly  they  do  this,  the  better 
for  both. 

It  is  not  alone  in  disregarding  the  rights  of 
others  when  disputes  and  conflicts  arise  and 
defying  the  law  for  the  protection  of  such 
rights  and  the  maintenance  of  public  order, 
that  "labour  leaders"  are  apt  to  err.  They 
have  been  disposed  to  claim  exemption  in  the 
law  itself  from  the  restraints  and  penalties 
which  have  been  imposed  upon  all  subjects 
and  for  the  general  good  while  their  appli- 
cation is  to  be  maintained  for  all  others. 

This  would  make  of  the  workmen,  known 
collectively  as  "wage  earners,"  a  "privileged 
class,"  in  so  far  as  they  organised  them- 
selves into  "a  class," — a  term  which  should 
not  be  tolerated  under  a  democratic  govern- 
ment. It  would  be  a  dangerous  departure 
from  the  principle  of  American  institutions, 
far  more  dangerous  to  workingmen  than  to 
capitalists,  who  can  wield  a  greater  power  if 
forced  to  unite  in  self-defence.  Only  a  small 
proportion  of  the  wage- workers  of  the  country 
can  be  so  united  in  an  organised  force  under 
systematic  leadership,  and  so  far  as  those 
who  are  so  organised  gain  anything  by  privi- 
lege and  exemption,  it  must  be  at  the  cost 


Honesty  in  Labour  Unionism   115 

of  others,  whose  condition  will  be  made  the 
harder.  The  organisation  will  be  privileged 
to  abuse  its  power  in  a  way  not  permitted 
to  others,  and  this  will  speedily  bring  the 
sentiment  of  the  community  against  it,  and 
obstruct  the  progress  of  unionism  for  its 
legitimate  objects.  The  purpose  of  such 
exemption  can  only  be  to  give  labour  organi- 
sation a  legal  advantage  over  those  who 
employ  labour,  whether  organised  or  not, 
and  it  would  impel  employers  to  an  attitude 
of  resistance  and  self-defence,  and  an  activity 
in  politics  which  it  is  as  desirable  for  labour 
as  for  capital  to  avoid.  Such  an  effort  to 
secure  standing  before  the  law  as  a  privileged 
class  is  calculated  to  lead  to  conflicts  and 
antagonisms  destructive  to  our  very  form 
of  government,  and  should  be  an  object  of 
dread  and  not  of  desire  for  honest  and  patri- 
otic workingmen.  They  above  all  other 
citizens  should  cling  to  the  fundamental 
principle  of  free  government, — equality  be- 
fore the  law. 


X 

POWER  OF  ORGANISED  CAPITAL 

/ORGANISATIONS  of  capital,  or  of  men 
V-'  owning  capital  which  is  employed  in 
processes  of  production  and  distribution,  have 
far  more  power  than  organisations  of  labour. 
They  are  not  used  so  blindly,  but  they  are 
about  as  liable  to  be  abused.  They  are  just 
as  likely  to  be  used  selfishly.  There  is  the 
same  desire  to  get  as  much  as  possible  of  the 
fruits  of  production  for  their  members,  with 
neglect  of  the  rights  of  others  and  of  the 
general  welfare  of  the  community.  The 
organisation  of  capital  has  taken  the  form  of 
incorporation  and  has  long  been  legalised  and 
more  or  less  regulated  by  public  authority. 
Its  power  is  necessarily  directed  in  each  case 
by  a  few  men  and  mainly  in  the  interest  of 
those  who  furnish  the  capital.  It  has  greatly 
increased  the  scale  upon  which  industries 
can  be  conducted  under  a  centralised  control 
and  the  scale  upon  which  any  business  can  be 

116 


Power  of  Organised  Capital    117 

successfully  carried  on.  At  the  same  time  it 
has  vastly  magnified  the  control  of  capital 
over  labour  and  made  more  necessary  the 
organisation  of  labour  for  the  defence  of  its 
own  interests. 

The  individual  who  owns  land,  buildings, 
and  machinery,  and  has  the  means  to  buy 
materials  and  hire  labour,  has  an  advantage 
over  those  who  work  for  him.  He  is  one 
and  controls  the  means  of  production.  They 
are  many  and  depend  upon  their  labour  for 
subsistence.  He  may  have  a  sense  of  justice 
and  a  disposition  to  do  right  by  those  who 
work  for  him,  and  in  any  case  the  relations 
are  personal  and  amenable  to  the  prevailing 
standard  of  right  and  wrong.  In  a  partner- 
ship the  power  of  capital  is  increased  but 
personal  relations  may  still  be  maintained. 
With  corporate  organisation  the  case  is 
different.  Those  who  have  immediate  rela- 
tion with  workmen  and  come  in  contact  with 
their  daily  life  are  themselves  employees  of 
the  corporation  and  have  little  control  over 
conditions.  However  honest  or  well  dis- 
posed they  may  be,  they  are  under  orders  or 
instructions  and  are  servants  of  a  system. 
Even  the  officers  and  managers  are  compelled 
to  act  as  trustees  for  others  and  feel  a  sense  of 


Ii8  Honest    Business 

obligation  to  owners  rather  than  of  duty  to 
employees. 

As  modern  industry  developed  and  its  in- 
strumentalities multiplied  in  number  and 
increased  in  effectiveness,  the  corporation 
became  necessary  to  bring  together  and 
apply  larger  capital  and  greater  power  for 
the  conduct  of  business  and  the  employment 
of  labour.  By  this  means  the  capital  of  a 
large  number  of  persons  could  be  massed 
together,  with  their  combined  ownership 
represented  in  shares  of  stock  and  with  their 
control  of  property  and  its  use  proportioned 
to  their  part  in  the  ownership.  Control 
could  no  longer  be  exercised  individually  and 
could  be  exercised  collectively  only  in  an 
indirect  way.  Personal  interest  became  lim- 
ited to  the  right  to  receive  a  proportionate 
share  in  the  profits  of  the  business.  The  law 
gave  an  artificial  personality  to  the  corpora- 
tion, with  certain  defined  rights  and  privileges, 
including  those  of  borrowing  money,  making 
contracts,  enforcing  obligations,  suing  and 
being  sued  at  law,  etc.  The  power  to  borrow 
money  enabled  it  to  raise  capital  on  bonds 
secured  by  mortgage  upon  property  which 
belonged  to  the  shareholders. 

So  the  business  of  producing  and  of  trading 


Po-wer  of  Organised  Capital    119 

in  products,  and  consequently  of  employing 
workmen  of  various  grades,  was  indefinitely 
enlarged,  while  the  control  was  concentrated 
in  few  hands.  The  great  body  of  stock- 
holders could  take  no  part  in  management. 
They  must  elect  from  their  number  a  board 
of  directors  to  represent  them  and  act  for 
them.  Their  suffrage  in  this  election  was 
proportioned  to  their  ownership  of  shares 
and  one  large  holder  might  have  as  much 
influence  as  many  small  ones.  As  corpora- 
tions grew  in  size,  only  a  small  proportion  of 
stockholders  could  attend  the  meetings  for 
electing  directors,  and  the  practice  grew 
up  of  voting  by  proxy,  or  giving  to  the  few 
attending  the  meetings  power  of  attorney  to 
act  for  the  many  absentees.  This  enabled 
the  few  who  had  a  large  interest  and  were  near 
to  the  management  to  make  up  a  "ticket" 
for  directors  and  obtain  proxies  to  insure  its 
election.  The  choice  could  be  made  from 
their  own  small  number,  thus  giving  them  the 
practical  control.  Then  the  board  of  direc- 
tors would  choose  the  officers  of  the  cor- 
poration and  managers  of  its  business  and 
prescribe  all  the  methods  of  conducting  it. 
Practically,  it  was  as  if  they  owned  the 
business  and  the  property,  though  most 


I2O  Honest   Business 

of  the  capital  was  furnished  by  a  large  num- 
ber of  others,  some  of  whom  held  certificates 
representing  shares  of  ownership,  and  others 
held  bonds  representing  debt  due  them  for 
borrowed  capital,  but  giving  them  no  part  in 
control  or  direction. 

In  this  way  a  small  number  of  men  closely 
associated  together  came  to  control  and  direct 
industrial  establishments  of  large  extent 
and  to  employ  a  multitude  of  men  in  various 
capacities,  with  whom  they  came  into  no 
personal  contact  and  most  of  whom  they 
could  not  personally  know.  While  this  sys- 
tem of  corporate  organisation  and  control 
of  industry  and  trade  was  the  outgrowth  of 
increased  production,  and,  by  reason  of  its 
effectiveness  on  a  large  scale,  contributed  to 
its  further  increase,  it  exaggerated  still  more 
the  inequality  of  condition  among  men  and 
enhanced  the  advantage  of  the  powerful 
few  over  the  dependent  many.  The  power 
thus  obtained,  like  all  power  in  human  hands, 
was  subject  to  abuse.  A  little  group  of  men, 
animated  by  selfish  motives,  perhaps  domi- 
nated by  one  ambitious  and  aggressive  person 
of  autocratic  temperament  eager  for  power 
and  wealth,  could  acquire  control  of  vast 
agencies  for  production  and  for  the  distri- 


Power  of  Organised  Capital    121 

bution  and  exchange  of  products  through 
trading,  transportation,  and  banking  systems, 
and  make  themselves  masters  of  the  fortunes 
of  thousands. 

In  the  management  of  any  great  corpora- 
tion in  these  days  a  small  group  of  men  under 
the  lead  of  one  dominant  person  almost  al- 
ways exercises  control  as  absolutely  as  if  the 
ownership  of  the  property  and  the  obligations 
and  responsibilities  were  their  own,  instead 
of  being  held  in  trust.  By  their  large  voting 
power  and  the  exercise  of  that  of  many  others 
by  proxy,  they  can  carry  things  their  own 
way  and  perpetuate  their  management  so 
long  as  they  escape  financial  loss.  The 
interests  of  creditors  and  shareholders,  as 
well  as  those  of  employees  of  every  grade,  are 
in  their  hands.  Except  as  restrained  by 
legal  limitations  duly  enforced,  they  may 
raise  more  capital  by  the  issue  of  stock  or 
of  bonds  and  direct  its  expenditure.  In  the 
marketing  of  these  securities  and  in  con- 
tracts for  the  expenditure  of  capital  in  new 
works  or  the  improvement  of  old,  it  is  possi- 
ble for  them  to  make  gains  for  themselves  and 
increase  their  personal  share  in  ownership 
and  control.  The  payment  of  interest  on 
bonds  and  dividends  on  stock  depends  mainly 


122  Honest    Business 

upon  them.  In  no  small  degree  they  deter- 
mine the  cost  and  the  selling  price  of  pro- 
ducts, and  they  are  absolute  masters  over 
the  wages  of  labour,  except  so  far  as  wage- 
earners  have  an  organised  power  of  resist- 
ance and  defence. 

As  the  result  of  the  development  of  cor- 
porate organisation  and  concentrated  control 
of  capital,  a  kind  of  modern  feudalism  has 
been  built  up,  with  a  "class"  of  "captains 
of  industry"  and  magnates  of  finance  upon 
whom  thousands  are  in  varying  degrees 
dependent.  Shareholders  depend  upon  them 
for  dividends  from  their  stock.  Employees 
depend  upon  them  for  salaries  for  ser- 
vice and  wages  for  labour  and  for  the  treat- 
ment they  receive.  In  no  small  degree  the 
"cost  of  living"  for  the  whole  community 
depends  upon  them.  Their  power  might  be 
exercised  beneficently,  with  justice  to  all, 
and  with  due  regard  for  the  interests  of  the 
public  and  for  the  general  well-being,  but 
that  is  not  the  tendency  in  human  nature 
in  its  present  stage  of  progress.  The  tend- 
ency is  to  self-aggrandisement  and  the 
increase  of  autocratic  or  oligarchic  power. 
Such  power  will  seek  to  intrench  and 
strengthen  itself  and  to  defend  itself  against 


Power  of  Organised  Capital    123 

attack,  restraint,  or  legal  regulation,  by  exert- 
ing its  influence  in  political  action  and  in  the 
making  and  administering  of  law.  It  is  a  de- 
velopment from  the  natural  inequality  of  men 
under  the  unrestrained  sway  of  selfishness. 
It  is  carried  to  its  culmination  when  powerful 
corporations  become  merged  or  closely 
associated  under  a  common  control,  whether 
by  a  board  of  trustees  holding  the  stock  of 
many  or  a  separate  corporate  holding  com- 
pany, or  by  mutual  agreement  of  boards  of 
directors  made  up  in  part  of  the  same  men, 
or  by  mere  common  understanding  between 
controlling  authorities. 

What  is  the  relation  of  competition  to  this 
growth  of  corporate  power,  and  what  is  to  be 
the  means  of  curbing  and  bridling  it,  to 
make  it  the  servant  and  not  the  master  of  the 
general  welfare?  The  theory  of  the  old 
economic  doctrines  was  that  competition 
would  prevent  such  consolidation  of  power, 
and  the  theory  still  prevails  that  competition 
may  restrain  it.  In  point  of  fact,  its  results 
are  achieved  by  competition  and  when  it  has 
accomplished  its  purpose  it  may  kill  com- 
petition, unless  prevented.  Competition  is 
the  weapon  with  which  the  strong  in  corpo- 
rate organisation  have  beaten  down  and 


124  Honest   Business 

trampled  out  the  weaker  or  have  absorbed 
their  substance  and  their  energies.  Left  to 
its  own  devices  it  would  create  monopolies 
and  bind  them  together  for  mutual  protection 
and  common  conquest,  until  plutocracy 
reigned  supreme. 

What  is  to  hinder  this  and  save  the  com- 
monweal from  the  consequences  of  a  struggle 
for  life  in  which  the  weaker  elements  shall 
survive  only  so  far  as  they  serve  the  uses  of 
the  stronger  and  by  them  are  permitted  to 
live?  The  process  of  evolution  cannot  be 
allowed  to  have  its  way,  as  if  there  were  no 
moral  sense,  no  conscience,  no  will  power  in 
the  elements  of  humanity,  and  no  destiny  but 
destruction,  any  more  than  in  the  conflict 
of  elements  which  make  up  the  physical 
world.  Appeal  must  be  made  to  the  altru- 
istic side  of  human  nature,  to  the  moral  sense, 
and  this  must  get  the  better  of  selfish  instincts 
and  establish  a  reign  of  conscience  as  well  as 
reason. 

The  power  of  the  few  in  the  management 
of  corporations  and  combinations  has  been 
allowed  to  go  far  beyond  their  rights  as  part 
owners,  and  they  have  used  it  to  increase 
their  advantage  and  their  wealth  at  the 
expense  of  other  shareholders.  There  needs 


Power  of  Organised  Capital    125 

to  be  better  co-operation  among  the  smaller 
shareholders.  The  system  of  stock-voting, 
which  allows  a  vote  for  every  share  held, 
without  regard  to  rights  pertaining  to  the 
individual,  gives  an  undue  advantage  to  the 
large  holder.  Beyond  a  certain  moderate 
limit  the  number  of  votes  should  be  re- 
stricted to  one  for  a  number  of  shares,  on  a 
graduated  scale.  The  proxies  for  many 
small  shareholders  should  not  be  turned  over 
to  the  few  large  shareholders  who  are  close 
to  the  control  as  officers,  or  to  committees  of 
directors,  to  be  used  in  their  own  way.  There 
should  be  a  legally  established  method  of 
representation  by  which  proxy  votes  shall 
reflect  the  will  of  those  to  whom  they  belong. 
As  a  further  qualification  of  the  power  of 
control,  either  a  smaller  proportion  of  capital 
should  be  raised  by  borrowing  on  bonds,  or 
bondholders  should  have  some  voice  in 
management  beyond  the  right  to  foreclose 
mortgages  and  reorganise  the  corporation 
when  it  becomes  unable  to  meet  its  legal 
obligations,  thereby  squeezing  out  share- 
holders and  taking  their  place. 

Until  there  is  a  higher  development  of 
moral  sense  as  applied  to  business  on  the 
part  of  those  directly  engaged  in  its  practical 


126  Honest   Business 

work,  there  will  be  need  of  some  kind  of 
control  or  regulation  on  behalf  of  the  public 
whose  well-being  is  at  stake.  That  can  go 
no  farther  with  effect  than  is  dictated  by  a 
prevailing  moral  sentiment  and  standard  of 
honesty  in  the  community,  but  so  far  it  must 
be  exercised  in  the  interest  of  progress. 
There  are  the  interests  of  investors  and 
creditors  to  be  guarded  and  the  rights  and 
claims  of  employed  workmen  to  be  considered. 
The  latter  have  their  own  organisation  as  a 
means  of  defence,  but  its  power  as  well  as 
that  of  organisation  of  capital  needs  to  be 
regulated  and  restrained.  No  more  in  one 
case  than  in  the  other  can  it  be  left  to  take 
its  own  course,  for  selfish  impulses  need  re- 
straint as  much  in  one  as  in  the  other. 

There  is  need  of  the  regulation  of  trades 
unions  and  federations  of  unions  as  much  as 
of  corporations  and  combinations  of  corpo- 
rate bodies.  The  organisation  should  be 
fairly  representative  of  its  members;  and  its 
directors  or  trustees  and  its  officers  should 
be  held  to  definite  obligations  and  respon- 
sibilities. Membership  should  be  as  com- 
pletely voluntary  as  that  of  shareholders  in 
a  corporation;  and  those  who  are  not  mem- 
bers should  be  as  unmolested  in  their  rights 


Power  of  Organised  Capital     127 

as  subjects  of  law,  as  those  who  choose  not 
to  invest  in  corporate  enterprises.  Labour 
unions  should  not  any  more  than  corpora- 
tions be  permitted  to  use  competition  of  the 
strong  to  kill  the  rivalry  of  the  weaker  and 
thereby  establish  a  monopoly  of  labour  in 
different  occupations.  They  and  their  mem- 
bers and  officers  should  be  in  all  things  as 
subject  to  law  as  should  corporations,  their 
shareholders  and  their  officers.  This  is  of 
the  essence  of  the  doctrine  of  equality  in 
rights  and  opportunities  before  the  law,  so 
long  as  uniform  obligations  are  observed, 
whatever  may  be  the  differences  in  capacity 
and  character. 

After  all  is  said  about  legal  rights  and  obli- 
gations, the  one  supreme  need  for  both  capital 
and  labour  is  the  development  of  a  higher  sense 
of  right,  the  constant  application  of  ethics 
in  economics,  and  the  cultivation  of  a  sound 
public  sentiment,  which  shall  enforce  higher 
standards  of  action  in  industry  and  business, 
as  well  as  in  social  and  political  life.  The  era 
of  piracy  and  brigandage  in  "making  money  " 
and  "making  a  living"  should  be  superseded 
by  the  reign  of  moral  principle.  This  is  a 
matter  which  cannot  be  forced  by  legislation, 
but  it  can  be  encouraged  and  supported  by 


128  Honest    Business 

the  enforcement  of  judicious  enactments. 
The  chief  means  of  promoting  it  is  a  sound 
education  of  the  "common  mind"  by  all  the 
agencies  which  can  be  appropriately  em- 
ployed for  the  purpose.  This  means  not  only 
development  and  direction  of  the  mental 
faculties  and  the  training  of  the  reason  and 
judgment,  but  the  stimulation  of  the  moral 
sentiments  and  the  inculcation  of  ethical 
principles,  the  teaching  of  honesty  and  right 
conduct,  not  merely  as  matter  of  personal 
salvation  from  dire  consequences  in  an 
unknown  hereafter,  but  as  a  part  of  the 
economic  policy  which  will  make  for  both 
the  wealth  of  nations  and  the  welfare  of 
peoples.  The  policy  of  unbridled  selfishness, 
with  its  attendant  derelictions  of  conduct, 
sacrifices  to  the  immediate  gain  of  the  grasp- 
ing few  the  lasting  benefit  of  the  many,  the 
safety  of  the  community,  and  the  perpetuity 
of  the  state  and  nation. 

It  is  a  common  fault  of  both  capitalists 
and  labour  men  to  have  too  much  regard  for 
immediate  results,  and  too  little  for  their 
own  permanent  interests.  Capitalists  of 
real  foresight  and  ability  but  little  scruple, 
may  gain  wealth  quickly  by  dishonest 
schemes,  which  sacrifice  the  rights  of  others 


Power  of  Organised  Capital     129 

and  virtually  rob  them  of  their  own  by  infla- 
tion of  securities  or  fraudulent  exploiting  and 
promoting.  This  works  ruin  to  the  prop- 
erties involved  and  if  the  "malefactors" 
escape  the  immediate  consequences,  they  are 
liable  to  lose  in  the  later  operations  through 
the  distrust  which  they  incur.  In  any  case, 
they  suffer  in  reputation  and  harm  the  busi- 
ness upon  which  subsequent  income  may  de- 
pend. In  the  long  run,  their  wealth  is  liable 
to  be  less  than  it  would  have  been  if  they 
had  devoted  their  ability  and  energies  persist- 
ently to  honourable  methods,  which  would 
bring  the  respect  of  their  fellow-men. 

Workmen,  in  insisting  upon  the  highest 
wages  and  the  easiest  terms  that  present 
conditions  will  permit,  and  using  the  power  of 
organisation  to  exact  them,  are  sacrificing 
the  future  to  the  present,  with  ultimate  loss 
to  themselves,  as  well  as  to  their  employers. 
When  the  industry  in  which  they  are  engaged 
slackens,  as  the  result  of  this  short-sighted 
and  exacting  policy,  many  of  them  lose  their 
employment  altogether  and  others  are  put 
on  short  time  or  lessened  wages,  as  the  alter- 
native of  idleness  with  no  income.  The  gain 
of  thirty  days  under  pressure  is  more  than 
offset  by  the  loss  in  three  hundred  days  of 


130  Honest   Business 

a  working  year,  while  the  opportunity  for 
steady  employment  is  permanently  curtailed. 
Better  $4.00  a  day  for  full  time  than  $5.00 
for  two  thirds  time  or  $6.00  for  half  time,  in 
the  year's  work.  Besides,  steady  work  is  far 
better  for  comfort  and  happiness  than  ir- 
regular and  spasmodic  employment.  Better 
also  the  favour  and  good-will  of  employers 
than  their  distrust  or  dislike. 

Workmen  employed  by  great  corporations 
are  apt  to  think  that  whatever  they  can 
exact  from  them  in  excess  of  a  fair  wage,  to 
the  injury  of  their  profits,  comes  from  the 
rich  or  the  well-to-do,  whereas  much  of  it 
may  be  extorted  from  the  scanty  income  of 
the  small  shareholders  or  estates  upon  which 
widows  and  orphans  depend  for  a  barely 
comfortable  living.  Stocks  of  the  manu- 
facturing companies  of  New  England  and 
some  other  parts  of  the  country,  for  instance, 
are  widely  distributed  among  small  holders 
who  have  invested  in  them  the  slender 
savings  of  many  years.  It  is  eminently 
desirable  that  this  kind  of  investment  should 
extend  and  should  be  made  as  secure  as 
possible,  and  that  workmen  themselves 
should  be  encouraged  to  be  investors  of 
capital,  and  to  have  an  interest  in  its 


Power  of  Organised  Capital    131 

safety  and   the   steadiness  of  income  from 
it. 

Indirectly,  many  of  them  have  an  interest 
far  beyond  what  they  realise.  Those  who 
are  thrifty  and  make  deposits  in  savings- 
banks  are  supplying  capital  which,  in  the 
aggregate,  amounts  to  vast  sums.  When  the 
interest  is  paid  to  them  or  is  credited  to  their 
account,  they  do  not  think  about  its  real 
source.  It  comes  from  investment  in  securi- 
ties of  corporations  which  conduct  great 
industrial  establishments  and  the  railroads 
of  the  country.  The  rate  of  interest  depends 
upon  the  earnings  and  profits  of  these,  and 
the  safety  of  the  principal  depends  upon  their 
prosperity  and  stability.  So  it  is  with  pre- 
miums upon  life  insurance  policies,  into  which 
many  slender  savings  go  to  insure  provision 
for  families  when  left  without  the  mainstay  of 
their  wage-earners.  These  premiums  are  not 
idle.  Policies  must  be  paid,  not  from  funds 
of  philanthropy  but  from  the  earnings  of 
these  steadily  invested  premiums,  which 
constitute  a  large  share  of  the  capital  of 
corporations.  These  investments  are  care- 
fully guarded  by  law  in  many  States  and 
should  be  so  in  all,  and  they  need  to  be 
guarded  by  depositors  in  savings-banks  and 


132  Honest  Business 

holders  of  life  insurance  policies,  a  large  pro- 
portion of  whom  are  wage-earners,  from  the 
risks  of  loss  and  injury  caused  by  strikes, 
boycotts,  and  exactions  of  every  kind  that 
are  not  justified. 

The  consequences  of  a  short-sighted  self- 
ishness and  disregard  for  the  rights  of 
others,  which  in  the  long  run  will  prove  to  be 
disregard  of  the  real  interests  of  those  guilty 
of  it,  cannot  be  effectively  averted  by  statute 
laws  or  by  public  authority.  But  if  against 
the  spirit  which  begets  them,  the  influences 
of  education,  in  the  home,  in  the  schools,  in 
the  text-books,  in  the  pulpit,  and  in  the  press 
of  the  country,  could  be  arrayed  for  one  gen- 
eration, it  would  work  a  transformation  which 
would  make  easy  the  solution  of  problems 
which  now  perplex  the  world.  It  would  make 
of  labour  unions  a  real  brotherhood,  of  cor- 
porations a  beneficent  power  in  the  hands  of 
upright  men,  and  would  ally  the  possessors  of 
capital  and  the  possessors  of  labour  capacity 
together  for  their  mutual  benefit  and  the  work- 
ing out  of  the  most  beneficial  results  for  the 
whole  commonwealth.  It  would  not  abolish 
riches  or  poverty  so  long  as  men  remain  un- 
equal in  capacity;  but  it  would  diffuse  the 
fruits  of  human  effort,  not  equally  but  equit- 


Power  of  Organised  Capital    133 

ably,  and  would  slowly  regenerate  the  quali- 
ties of  human  nature  itself,  which  under  the 
existing  system  tend  strongly  to  degeneration. 
It  is  a  task  of  more  than  one  generation,  but 
it  should  be  pursued  assiduously.  It  would 
grow  easier  with  experience,  but  its  difficulty 
will  increase  with  neglect. 


XI 

REGULATION  OF  CAPITAL  AND  LABOUR 

IT  was  part  of  the  doctrine  of  laissez-faire 
that  industry  and  trade  should  be  left  to 
the  initiative  and  direction  of  private  effort, 
individual  and  collective,  under  the  influence 
of  emulation  and  competition,  and  that  there 
should  be  the  least  possible  interference  by 
government.  Government  should  look  to 
the  ordering  of  public  affairs,  those  which 
affect  all  its  subjects  alike,  and  care  for  the 
interests  of  the  nation  as  a  whole,  the  main- 
tenance of  order,  the  administration  of 
justice,  the  "common  defence  and  general 
welfare,"  and  leave  men  free  in  their  indus- 
trial and  commercial  activities,  except  as 
these  might  be  affected  by  policies  for  raising 
revenue  or  conserving  national  power.  The 
free  operation  of  individual  self-interest 
might  result  in  incidental  wrongs  and  abuses, 
but  it  was  better  to  leave  them  to  be  worked 
out  and  rectified  through  experience  than  for 
134 


Regulation  135 

government  authority  to  meddle  for  their 
correction. 

In  the  huge  development  of  modern  times, 
the  great  association  of  effort,  the  organi- 
sation of  capital  and  the  organisation  of  la- 
bour, new  and  difficult  problems  have  been 
evolved,  which  there  is  no  adequate  means 
of  solving  except  through  that  organisation  of 
a  whole  people  which  is  called  Government. 
Let  us  keep  in  mind  that  organisation  of 
capital  means  organisation  of  men  who  own 
and  use  capital  in  the  employment  of  labour 
for  production  and  the  distribution  of  pro- 
ducts, and  who  are  subjects  of  government; 
and  that  organisation  of  labour  means  the 
organisation  of  men  who  are  employed  at 
work  in  production  and  distribution  and  who 
are  also  subjects  of  government.  Govern- 
ment itself,  in  an  American  sense  of  the  term, 
is  an  organisation,  not  of  blind  forces  or  old 
traditions,  but  of  men  who  constitute  the 
whole  people  and  who  act  through  their  own 
chosen  representatives  and  officers,  delegates 
of  their  power,  to  direct  their  common 
affairs  just  so  far  as  they  need  such  general 
direction. 

The  people  themselves  are  both  the  source 
of  the  power  of  government  and  the  subjects 


136  Honest   Business 

of  government.  Even  where  government  is 
not  "popular,"  or  democratic,  it  is  an  or- 
ganisation of  men  who  assume  to  represent 
the  people  and  act  in  their  behalf  and  for 
them.  They  are  ruled  by  human  motives 
and  purposes  and  not  by  a  mechanism  under 
the  direction  of  divinity  or  destiny.  In 
treating  of  capital,  of  labour,  of  government, 
we  are  dealing  with  men,  with  the  forces  of 
human  motives  and  purposes,  human  senti- 
ments and  impulses. 

Men  who  control  capital  and  employ  labour 
are  organised  in  corporations  in  different 
industries  and  branches  of  trade,  and  in  the 
direction  of  agencies  of  distribution  and 
exchange.  The  capital  may  be  owned  by  a 
large  proportion  of  the  people,  but  under 
organisation  it  is  controlled  by  a  small  pro- 
portion. These  corporations  may  be  large 
or  small,  but  the  tendency  is  to  large  organi- 
sations which  may  dominate  a  particular 
industry  or  branch  of  trade.  They  may  be 
affiliated  or  associated  together  so  as  to  act 
in  unison  for  their  general  interest  or  the 
interest  of  those  who  direct  them.  In  each 
case  a  small  group  of  men  may  exercise  a 
controlling  power.  The  same  group,  or 
association  of  groups  of  men  may  acquire  a 


Regulation  137 

dominating  power  in  more  than  one  produc- 
tive industry  and  in  trade  in  the  products  of 
the  industries,  and  may  reach  out  for  a  large 
control  over  the  agencies  of  distribution  and 
exchange.  They  may  be  representatives 
and  trustees  of  many  shareholders  and  credi- 
tors ;  the  property  over  which  they  hold  sway 
and  the  instrumentalities  which  they  direct 
may  be  owned  by  many  and  their  own  share 
in  them  may  be  relatively  small;  but  their 
position  gives  them  a  power  which  they  can 
exercise  largely  at  their  discretion  and  with 
little  restraint  from  their  numerous  and 
scattered  constituents. 

Necessarily  the  men  who  attain  this  con- 
trolling and  directing  position  are  able, 
energetic,  assertive,  commanding  men.  They 
are  strong  men.  They  may  be  ambitious  for 
wealth  and  power.  They  may  not  be  men 
of  high  integrity  or  a  keen  sense  of  justice. 
They  may  be  strongly  selfish  and  care  little 
for  the  human  forces  which  they  direct 
except  to  make  them  effective  and  keep 
them  under  discipline  for  their  own  pur- 
poses. They  may  care  little  for  individual 
rights  or  the  welfare  of  those  employed. 
They  may  be  little  concerned  for  the  rights 
or  welfare  of  the  community  at  large  except 


i,v  Honest  Business 

as  it  yields  revenue  to  them.  Their  interest 
in  government  may  be  limited  to  the  desire 
that  it  help  or  protect,  or  at  least  do  not 
hinder,  their  enterprises;  and  they  may 
exert  their  own  power  to  make  government 
subservient  to  them  rather  than  supervisory 
over  them.  These  men  are  in  a  position  to 
draw  wealth  to  themselves  which  does  not 
belong  to  them  and  which  is  drained  from  the 
earnings  and  savings  of  others.  They  may 
so  direct  affairs  as  to  leave  to  the  share- 
holders whom  they  represent  less  than  they 
are  entitled  to.  They  may  allow  to  employees 
and  workmen  less  than  a  fair  remuneration 
for  their  service  and  labour.  They  may 
through  their  combinations  draw  in  prices  and 
charges  from  the  substance  of  the  people  in 
a  way  to  enrich  themselves,  restrict  the 
incomes  of  many,  and  keep  a  multitude  in 
poverty. 

This  is  not  a  general  characterisation  of 
capitalists  and  employers  on  a  large  scale,  or 
the  officers  and  directors  of  great  corpora- 
tions. It  is  admitted  that  among  them  are 
men  of  high  character  as  well  as  great  ability. 
It  is  a  statement  of  what  is  possible  and  of 
that  toward  which  unrestrained  emulation  and 
striving  tend.  In  this  strife  for  great  success 


Regulation  139 

and  power  in  the  world  of  industry  and  busi- 
ness, the  tendency  is  to  drag  the  standard 
down  to  that  of  the  least  scrupulous  and  not  to 
elevate  it  to  that  which  the  most  scrupulous 
would  gladly  establish  and  maintain.  Shall 
this  tendency  be  allowed  to  assert  itself 
and  develop  to  its  logical  results  in  a  pluto- 
cracy that  will  not  only  control  a  vast  system 
of  industry,  trade,  transportation,  and  finance, 
but  dominate  professional  service  and  sway 
the  government  of  the  people?  If  the 
government  of  the  people  is  for  the  people, 
shall  it  not  continue  to  be  by  the  people, 
and  shall  they  not  assert  their  power  over 
the  organisation  of  capital  to  make  it  serve 
the  interest  of  all  and  contribute  to  the  gen- 
eral welfare,  and  not  be  used  to  build  up 
wealth  and  power  for  a  ruling  class? 

The  rights  and  interests  at  stake  are  not 
merely  those  of  "labour, "  that  is,  of  the  men 
who  are  employed  by  "organised  capital." 
They  are  those  of  the  entire  community,  and 
especially  of  the  great  mass  which  is  not 
organised,  except  in  so  far  as  the  citizenship 
of  a  state  or  nation  is  an  organisation,  the 
mass  who  can  act  only  through  the  organi- 
sation of  government.  "Labour,"  the  men 
who  are  employed  to  perform  service  and  do 


14°  Honest    Business 

work,  have  their  organisation  whose  rights 
and  interests  are  not  identical  with  those  of 
the  public  or  that  mass  of  people  whose 
only  organisation  is  government.  Should 
not  that  organised  government  which  is  the 
agency  of  all  exercise  supervision  and  re- 
straint over  both  organised  capital  and  organ- 
ised labour,  so  far  as  it  may  be  necessary  for 
the  protection  or  promotion  of  the  general 
welfare?  Organised  labour  may  be  a  menace 
and  a  danger  to  the  general  well-being  as 
well  as  organised  capital. 

We  have  spoken  in  an  earlier  chapter 
of  some  of  the  mistakes  of  labour  unions, 
which  cause  economic  injury  to  workingmen 
as  well  as  to  employers,  and  to  the  commun- 
ity whose  wants  are  supplied  by  productive 
industry.  These  may  be  corrected  through 
experience  and  the  inculcation  of  a  better 
knowledge  of  principles  and  a  higher  stand- 
ard of  action.  The  danger  does  not  come 
from  that  source.  Organised  labour  has 
been  extending  its  power,  not  only  by  multi- 
plying unions  in  different  industries,  which  is 
not  in  itself  objectionable,  any  more  than 
multiplying  corporations,  but  by  affiliating 
or  federating  them  together  to  exercise  a 
united  influence,  which  may  be  as  much 


Regulation  141 

abused  as  that  of  combinations  or  associa- 
tions of  capital.  A  union  of  the  workmen  of 
a  single  employer,  however  large  their  num- 
ber, for  the  purpose  of  making  a  collective 
contract  for  their  service,  prescribing  for  a 
certain  term  the  wages,  hours,  and  other 
conditions  of  their  labour,  has  comparatively 
little  power  for  enforcing  demands  or  insuring 
compliance  with  contracts.  These  workmen 
may  strike  work  and  peaceably  abandon  their 
"jobs,"  but  their  places  may  be  filled  more 
or  less  readily,  while  they  find  difficulty 
in  obtaining  new  ones.  They  may  use  up 
such  savings  as  they  have  and  suffer  privation, 
while  the  employers  only  suffer  loss  which 
they  can  endure  without  hardship  and  soon 
recoup. 

This  is  what  provokes  hostility  to  non- 
union labour  and  tempts  to  violence  to 
prevent  its  employment  or  to  prevent  the 
prosecution  of  an  industry  without  taking 
back  the  strikers  on  better  terms.  Attempts 
to  force  the  employer  either  by  peaceable  or 
violent  means  are  apt  to  be  futile  unless  union 
men  in  the  same  trade  or  industry  sustain 
each  other.  Hence  they  all  become  mem- 
bers of  the  same  organised  union  or  the  sepa- 
rate unions  are  so  affiliated  as  to  act  together, 


142  Honest    Business 

making  the  cause  of  one  the  cause  of  all. 
Then  the  demands  of  the  workmen  of  one 
employer  may  be  supported  by  a  union  whose 
members  have  different  employers;  and,  if 
they  "go  on  strike,"  they  receive  help  from 
the  entire  organisation.  If  this  does  not 
enable  them  to  hold  out,  there  may  be  a 
general  strike  in  the  particular  industry 
within  a  district  or  section  or  over  a  wider 
area,  even  throughout  the  industry  in  the 
entire  country,  to  bring  the  obdurate  em- 
ployer to  terms. 

In  this  there  is  evident  injustice  to  the 
employers  who  are  not  parties  to  the  dispute, 
and  against  whom  there  is  no  complaint. 
Their  workmen  may  quit  under  orders  which 
they  have  voluntarily  bound  themselves  to 
obey.  It  may  be  against  their  will  that  they 
are  forced  at  heavy  cost  to  themselves  to 
aid  in  a  contest  in  which  they  have  no  re- 
sponsibility and  no  obligation,  and  in  which 
their  interest  and  their  sympathy  may  be 
against  those  whom  they  are  compelled  to 
aid.  Moreover,  the  whole  community  which 
is  served  by  the  disturbed  industry  is  made 
to  suffer  loss,  and  other  employments  are 
interrupted  and  their  workmen  made  idle. 
In  this  there  is  wrong  against  which  there 


Regulation  143 

should  be  safeguards   and  for  which  there 
should  be  redress. 

The  general  strike  may  be  a  more  serious 
calamity  for  the  time  being  than  could  be 
inflicted  by  organised  capital  or  than  organ- 
ised capital  would  dare  to  attempt.  A  strike 
to  enforce  the  demands  of  a  union  of  work- 
men which  causes  loss  or  injury  to  those  who 
are  not  responsible  for  their  rejection  and 
have  no  power  to  settle  the  dispute,  is  an 
injustice.  Violence  or  intimidation  to  pre- 
vent others  from  taking  employment  which 
the  strikers  have  abandoned  is  not  only  an 
injustice,  but  a  violation  of  wholesome  laws 
for  protecting  personal  rights.  Violence 
which  interrupts  business  and  injures  prop- 
erty is  an  injustice  and  a  violation  of  laws  for 
the  protection  of  property  rights  and  the 
maintenance  of  public  order.  Strikes  that 
seriously  interrupt  general  industry  and 
business  and  the  service  of  the  public  are  an 
outrage  that  cannot  be  safely  tolerated. 
They  destroy  values  and  check  the  creation 
of  new  values,  and  do  economic  injury  to 
entire  communities,  and  even  to  states  and 
nation.  That  will  have  to  be  made  up  by 
labour  and  capital  for  which  the  return  is 
impaired. 


144  Honest   Business 

The  general  or  concerted  strike  is  in  the 
nature  of  a  conspiracy  against  the  general 
welfare.  Against  that  the  community  has  a 
right  to  be  protected.  A  concerted  boycott 
of  the  goods  or  the  trade  of  those  not  directly 
concerned  in  a  labour  dispute,  which  coerces 
others  than  those  concerned  into  refusing  to 
"patronise,"  in  short,  which  goes  beyond  the 
freedom  of  every  man  individually  to  buy  or 
sell,  to  work  or  to  employ  labour  where  he 
will,  does  rank  injustice  to  many  and  should 
not  be  tolerated. 

How  then  are  the  "rights  of  labour"  and 
the  rights  of  capital,  which  means  the  per- 
sonal rights  of  those  who  work  for  others 
and  of  those  who  furnish  capital  and  employ 
the  labour  of  others,  to  be  maintained  on 
a  plane  of  justice  and  sound  economics,  so 
that  each  shall  obtain  substantially  that  to 
which  he  is  fairly  entitled  ?  Free  competition 
will  not  accomplish  it,  because  the  stronger 
will  get  the  better  of  the  weaker  and  selfish 
impulses  will  prevail  over  altruistic  impulses 
and  the  sense  of  justice,  unless  restrained  by  a 
prevailing  standard  which  the  sentiment  of 
the  community  is  strong  enough  to  sustain, 
under  social  penalties  for  its  violation.  This 
might  be  the  case  under  millennial  conditions 


Regulation  145 

or  in  an  ideal  state  of  society,  but  that  appears 
to  be  far  off.  Voluntary  association  and 
concerted  effort  on  the  side  of  labour,  or  of 
those  who  work  for  wages,  and  on  the  side  of 
capital,  or  of  those  who  employ  men  and 
pay  wages,  does  not  accomplish  it  at  the 
present  stage  of  human  progress.  The  at- 
tempt is  largely  misdirected  and  beset  with 
errors.  It  is  attended  by  continual  failures. 
It  causes  a  vast  deal  of  economic  waste  and 
loss,  and  hinders  prosperity.  It  is  a  fruitful 
source  of  "outrage  and  of  wrong." 

No  people  is  at  a  stage  of  development 
where  it  is  capable  of  self-government  through 
individual  action,  private  co-operation,  or 
voluntary  association.  It  is  not  safe  or 
salutary  to  leave  every  man  to  do  that  which 
is  good  in  his  own  eyes.  That  will  not  be 
practicable  until  all  men  are  equal  or  the 
race  is  far  nearer  perfection  than  at  pre- 
sent. It  would  mean  anarchy,  and  at  the 
present  stage  of  human  advancement  anarchy 
would  work  neither  prosperity  nor  peace. 
Government,  to  be  effective  and  orderly, 
and  to  produce  the  best  results  for  its  sub- 
jects, must  be  organised  in  a  way  to  prescribe 
duties  and  functions  and  to  have  capable  men 
fitted  by  selection  and  training  to  perform 


146  Honest  Business 

them.  This  is  generally  acknowledged  in 
regard  to  various  relations  of  men  in  consti- 
tuting a  state,  and  it  may  be  extended  to 
apply  more  widely  as  evolution  works  a 
change  in  conditions  so  as  to  require  it  for 
the  common  defence  and  general  welfare. 
Government  is  not  a  fixed  and  stable  thing, 
as  the  variety  of  its  forms  and  the  changes 
it  undergoes  in  its  various  forms  constantly 
testify. 

The  large  and  complex  industrial  and  com- 
mercial development  of  this  age  has  made  it 
necessary  for  governments  to  take  up  new 
problems  and  new  tasks,  and  they  will  be 
constrained  to  regulate  the  relations  of 
"capital  and  labour,"  that  is,  the  relations 
of  their  subjects  who  supply  the  instrumen- 
talities and  direct  the  operations  of  industry 
and  trade  and  those  whom  these  employ  and 
pay  for  various  kinds  and  grades  of  labour. 
They  must  do  this,  not  simply  that  justice 
may  be  done  in  these  relations  of  employer 
and  employed,  but  that  the  interests  of  the 
communities  of  which  they  are  a  part  may  be 
conserved  and  safeguarded  for  the  general 
well-being.  This  is  the  opposite  of  anarchy 
and  it  has  no  kinship  to  socialism.  It  is  a 
step  forward  in  the  self-government  of  peoples 


Regulation  147 

through  chosen  representatives  or  delegates 
of  their  power.  It  may  even  be  a  step  for- 
ward in  government  by  a  constituted  or 
hereditary  class  of  men  representing  people  by 
their  consent  rather  than  their  choice. 

There  is  still  a  great  deal  of  individual 
employment  where  men  come  together  and 
agree  upon  terms  and  maintain  their  own 
relations  on  a  footing  of  amity  and  mutual 
understanding.  It  is  only  where  there  is 
organisation  on  a  large  scale  that  the  direct 
intervention  of  government  is  necessary  to 
regulate  the  relations  of  employers  and 
employed,  and  then  only  where  they  fail  to  do 
it  themselves  on  terms  of  mutual  satisfaction 
and  with  due  regard  for  the  interests  affected 
by  their  relations.  Corporations  and  com- 
binations or  associations  of  capital,  whereby 
labour  is  employed  on  a  large  scale,  are  di- 
rected and  managed,  not  by  a  numerous  body 
of  shareholders,  but  by  a  small  number  of 
directors  and  officers  to  whom  power  and 
responsibility  are  delegated.  The  conduct 
of  these  can  be  prescribed  and  regulated  by 
government  so  far  as  that  may  be  necessary 
for  the  common  good.  Organisations  of 
labour,  or  of  workmen,  unions,  brotherhoods, 
federations,  or  what  not,  are  not  directed  or 


148  Honest  Business 

managed  by  their  individual  members,  but 
by  selected  boards  or  committees  and  officers, 
acting  under  constitutions  and  rules,  to  whom 
authority  and  responsibility  are  delegated. 
These  may  also  be  held  responsible  for  their 
actions  under  government  regulation.  Why 
should  they  be  free  to  act  arbitrarily  or 
unjustly,  to  disregard  the  rights  of  others 
or  the  interests  of  the  community,  any  more 
than  those  who  direct  and  manage  corpora- 
tions, or  organisations  of  those  who  furnish 
the  capital  necessary  to  the  employment  of 
labour? 

There  is  no  reason  why  a  form  of  incorpo- 
ration should  not  be  provided  for  labour,  with 
defined  powers,  privileges,  and  obligations. 
Men  cannot  be  compelled  to  organise  under 
any  prescribed  form,  but  they  can  be  denied 
the  exercise  of  certain  powers  and  privileges 
unless  they  do  so;  and  voluntary  associations, 
whether  of  capital  or  labour,  can  be  made 
amenable  to  public  authority  in  regard  to  the 
things  they  may  do  and  those  they  may  not 
do,  and  they  may  be  held  responsible  through 
those  to  whom  power  and  responsibility  are 
delegated.  There  is  no  reason  why  there 
should  not  be  definite  legislation  regulating 
the  relations  of  capital  and  labour  with  each 


Regulation  149 

other  and  the  relations  of  both  to  the  public, 
so  far  as  that  may  be  necessary  for  authori- 
tatively settling  disputes  which  may  rise 
between  them.  So  far  as  their  relations  are 
voluntarily  regulated  in  an  amicable  way 
by  mutual  agreement,  they  need  not  be 
interfered  with  unless  that  regulation  is  in 
conflict  with  the  interests  of  others  and  of 
the  public. 

A  system  of  regulation,  in  order  to  be 
carried  out  effectively,  would  require  a 
scheme  of  administration  adapted  to  the 
purpose,  and  a  competent  tribunal  for 
adjudicating  disputed  questions  and  render- 
ing judgment.  It  is  sometimes  contended 
that  under  a  system  of  the  kind  there  can  be 
no  way  of  enforcing  awards  or  penalties. 
Why  not,  as  well  as  in  other  matters  where 
government  control  is  deemed  necessary? 
Men  cannot  be  compelled  to  work  on  certain 
prescribed  terms  or  to  hire  others  to  work  on 
such  terms,  but  they  can  be  made  to  abide 
by  a  judgment  rendered  by  competent 
authority  where  their  rights  and  claims  have 
been  duly  passed  upon,  and  to  suffer  the 
penalty  if  they  do  not.  They  can  be  made  to 
leave  others  in  peace,  and  to  accept  the 
award  of  a  tribunal  or  go  their  own  way  in 


i~<>  Honest   Business 

peace.  It  does  not  follow  because  a  thing 
has  not  been  done  or  is  something  to  which 
we  are  unaccustomed,  that  it  cannot  be  made 
to  work  if  the  object  is  one  desirable  to  attain. 
Labour  disputes,  like  other  controversies  over 
the  rights  and  claims  of  men,  can  be  settled 
by  government  interposition,  so  far  as  that 
may  be  found  necessary  for  the  general  wel- 
fare, for  the  promotion  of  which  governments 
are  instituted  among  men. 


XII 

CAN   GOVERNMENT   REGULATE   BUSINESS? 

IF  the  government  in  this  country  is,  to  a 
constantly  increasing  extent,  to  under- 
take the  regulation  of  the  affairs  of  the  people 
in  their  industrial  and  business  relations,  it 
becomes  a  question  of  vital  importance 
whether  it  is  in  form  and  method  fitted  to 
exercise  the  necessary  power.  Here  again 
it  is  far  more  a  question  of  the  capacity  and  ) 
character  of  men  than  of  mechanism  or  kind 
of  organisation.  Government  cannot  make 
its^  subjects  honest  by  legislation  or  the  ad- 
ministration of  law;  but  if  it  is  to  endeavour 
to  promote  a  higher  standard  of  honesty  in 
the  conduct  of  their  business,  it  must  itself 
be  both  honest  and  wise.  That  means  that 
the  men  who  are  charged  with  making  and 
administering  its  laws,  must  be  competent 
and  upright.  At  least  the  controlling  major- 
ity must  be  so. 

It  is  the  theory  of  government  in  America 


152  Honest   Business 

that  the  people  rule.  That  theory  is  based 
upon  the  assumption  that  the  people  as  a 
whole  are  fit  for  self-government  and  capable 
of  making  it  the  best  government  for  them- 
selves. Yet  there  is  distrust  of  any  extension 
of  the  powers  of  government.  That  is 
the  chief  obstacle  in  the  way  of  establishing 
any  legal  and  official  regulation  of  the  re- 
lations of  capital  and  labour, — the  relations 
of  large  bodies  of  men  engaged  in  the  indus- 
tries and  the  trade  by  which  the  people  are 
sustained,  whether  in  poverty,  in  comfort,  or 
in  luxury,  and  by  which  communities  are 
made  prosperous  and  progressive  or  other- 
wise. 

Are  the  people  fit  for  and  capable  of  self- 
government?  It  is  a  mere  truism  to  say  that 
it  depends  upon  the  capacity  and  character 
of  the  people.  We  must  revert  once  more  to 
the  self-evident  truth  that  all  men  are  dis- 
tinctly not  created  equal,  and  are  not  endowed 
with  rights  that  are  inalienable,  or  that  may 
not  be  forfeited  as  the  result  of  their  in- 
capacity or  misconduct.  Some  persons  are 
capable  of  ruling  themselves  to  the  best  ad- 
vantage and  the  utmost  benefit  of  themselves 
and  others,  but  many  fail  and  need  the  help 
and  support  of  those  who  are  wiser  and 


Can  Government  Regulate?    153 

more  capable  than  themselves.  Some  peoples 
are  on  the  whole  sufficiently  intelligent  and 
enlightened  for  self-government  and  some  are 
not.  The  average  in  a  particular  nation  may 
be  high  enough  to  make  a  system  of  self- 
government  better  and  safer  than  govern- 
ment by  an  established  ruling  class,  or  by 
hereditary  rulers  and  their  advisers,  however 
wisely  the  latter  may  be  chosen. 

Even  with  this  higher  average,  the  capacity 
and  the  actual  power  are  not  equally  dis- 
tributed, for  the  more  capable  and  more 
highly  endowed  exert  their  influence  over 
large  numbers  of  the  less  capable,  who  are 
swayed  in  their  opinions  and  in  their  political 
conduct  by  leading  minds  and  forceful  char- 
acters. The  controlling  public  opinion  is  not 
the  average,  reckoned  by  numbers,  but  the 
resultant  of  the  influences  exerted  by  strong 
minds  and  weak,  by  knowledge  and  ignorance, 
by  the  trained  and  disciplined  and  the  un- 
taught, by  varying  forces  of  moral  sentiment. 
It  is  through  the  power  of  public  opinion, 
evolved  by  these  conflicting  influences,  that 
the  people  rule  in  a  democracy,  and  not  by 
mere  force  of  numbers. 

It  depends  upon  the  strength  and  quality 
of  the  power  that  may  be  thus  evolved, 


154  Honest    Business 

whether  the  people  of  a  nation  or  country  are 
fit  for  self-government  or  can  rule  themselves 
better  than  they  can  be  ruled  by  a  part  of 
their  number.  It  needs  no  argument  to 
prove  that  there  are  still  peoples  on  the  face 
of  the  earth  who  are  not  capable  of  self-gov- 
ernment in  the  democratic  sense.  If  left  to 
that  there  would  be  sheer  barbarism,  no 
ordered  government,  and  no  progress;  but 
where  there  is  a  tendency  to  progress  the 
stronger  and  more  capable  take  power  upon 
themselves  and  do  the  ruling  after  a  fashion. 
This  is  the  beginning  of  government,  which 
by  revolution  or  evolution  may  expand  to  a 
larger  and  larger  ruling  class  and  ultimately 
reach  the  periphery  of  the  whole  mass.  Even 
then  there  will  be  differences  and  inequalities. 
Government  must  necessarily  be  through 
representatives  and  delegates  of  popular 
power,  and  voice  in  their  election  may  be 
limited  to  adult  males,  and  may  be  qualified 
among  those  so  as  to  exclude  the  incapable  or 
those  who  are  deemed  incapable.  Absolute 


popular  government  is  unknown  on  the 
ftianet  and'  could  hardly  be  distinguished" 

from  anarchy  if  attempted.  Popular  govern- 
ment as ~Icnown~~arnong  civilised  nations  is 
representative  government,  and  the  degree 


Can  Government  Regulate?    155 

of  popularity  is  determined  by  the  suffrage 

for  choosing  those  who  are  to  exercise  the 

powers  and  perform  the  functions  of  admin- 

r,  istering  the  government. 

Not  only  are  there  people  who  are  not 
self-governing  because  they  are  incapable 
of  establishing  and  maintaining  a  democratic 
or  representative  system,  but  there  are 
people  who  nominally  have  such  a  system 
but  are  incapable  of  administering  it  with 
success.  The  form  may  remain,  but  the 
substance  becomes  government  by  a  ruling 
class,  sometimes  by  a  dictator  and  the  more 
or  less  capable  men  with  whom  he  surrounds 
himself  and  who  are  subservient  to  him.  A 
government  may  be  republican  or  democra- 
tic in  form  and  its  paper  constitution  may 
be  admirably  framed  according  to  the  best 
models ;  and  yet  the  people  under  that  govern- 
ment may  not  be  in  any  sense  or  in  any  degree 
self-governing,  simply  because  they  show 
themselves  incapable  of  it.  Such  an  artificial 
system  is  unstable  and  subject  to  frequent 
revolutionary  attempts  to  dislodge  those 
in  control.  Perhaps  it  is  only  through  these 
that  the  people  can  grow  up  to  the  system, 
but  until  they  do  so  they  will  not  have  real 
self-government. 


156  Honest    Business 

Let  us  come  home  to  our  own  country. 
Are  all  the  people  of  the  United  States  fit 
to  take  an  equal  share  in  the  government  of 
city,  state,  and  nation?  Do  wisdom  and 
capacity  reside  in  the  mass;  and  if  so,  how  is  it 
to  find  expression  in  word  and  act,  in  legis- 
lation and  administration,  for  the  general 
good?  It  is  certain  that  all  adult  male  citi- 
zens are  not  equally  qualified  for  an  intelli- 
gent and  honest  exercise  of  the  suffrage,  and 
so  far  as  its  exercise  fails  to  be  intelligent  and 
honest  it  tends  to  degrade  the  character  of 
the  government.  It  tends  to  put  power  in  the 
hands  of  organised  groups  of  politicans  who 
aim  at  selfish  ends  and  employ  evil  means  to 
attain  them.  It  tends  to  breed  a  ruling 
class  which  is  not  composed  of  the  best  citi- 
zens and  which  may  derive  its  main  support 
from  the  baser  elements  of  the  community. 

Where  the  suffrage  for  the  election  of  repre- 
sentatives and  delegates  of  the  people,  who 
are  to  exercise  the  actual  powers  of  govern- 
ment, is  largely  in  the  hands  of  those  whose 
intelligence  and  moral  sense  are  of  a  low 
order,  the  crafty  and  unscrupulous  gain  con- 
trol and  use  the  authority  delegated  to  them 
for  their  own  advantage  and  profit,  and  to 
the  detriment  of  the  commonweal.  They 


Can  Government  Regulate?    157 

become  the  masters  of  the  people  rather  than 
their  servants,  "bosses"  rather  than  leaders, 
and  use  political  organisation  as  a  "machine" 
to  accomplish  their  ends  and  maintain  their 
power.  The  fault  is  not  primarily  in  the 
unfitness  of  those  entrusted  with  power,  but 
in  the  unfitness  of  those  who  entrust  them 
with  it,  and  that  is  where  the  remedy  is 
to  be  applied  for  the  resulting  evils.  Good 
government  cannot  come  from  ignorance, 
incapacity,  and  a  low  standard  of  moral 
conduct  through  any  system,  however  well- 
devised. 

There  is  another  danger  to  which  popular 
government,  or  government  by  the  people,  is 
subject  when  the  qualifications  of  a  large 
part  of  the  people  for  exercising  the  power  of 
self-government  are  of  a  low  order.  A  self- 
seeking  demagogue  may  arise  at  a  time  of 
dissatisfaction  and  unrest,  such  as  is  liable 
to  come  as  the  result  of  misgovernment  or  of 
economic  and  social  conditions  which  impair 
the  general  prosperity.  Regardless  of  the 
real  causes  of  discontent,  which  may  be 
complex  or  obscure  or  not  understood,  and 
regardless  of  the  proper  remedy  for  a  distress- 
ing situation,  there  may  be  a  vague  but 
intense  desire  for  a  change  which  shall 


158  Honest   Business 

somehow  make  things  more  comfortable, 
nobody  knows  exactly  how. 

Such  a  time  is  the  opportunity  of  the 
demagogue.  He  may  be  a  crafty  and  design- 
ing person  with  an  overweening  ambition  and 
a  vast  conceit.  He  may  be  morally  unscrupu- 
lous and  may  work,  not  only  upon  ignorance, 
passion,  and  prejudice,  and  inflame  the  pre- 
vailing discontent,  but  he  may  also  appeal 
to  the  selfish  and  sordid  instincts  of  human 
nature,  using  corrupt  means  and  delusive 
promises  of  what  he  knows  he  cannot  per- 
form, in  order  to  get  power  into  his  hands. 
Having  obtained  it,  he  may  make  use  of  all  its 
agencies  and  instrumentalities  to  strengthen 
and  maintain  his  hold  and  defeat  the  hopes 
of  the  people  who  have  elevated  him  in  the 
expectation  that  he  would  be  the  servant  of 
their  will  instead  of  the  master  of  their  welfare. 
He  may  establish  in  the  name  of  democracy 
an  autocracy  or  an  oligarchy  and  endeavour  to 
maintain  it  until  he  can  pass  it  to  others  of  his 
choice,  and  it  will  take  time  to  dislodge  him 
and  recover  the  lost  ground  of  popular  rule 
through  representative  government. 

A  demagogue  of  this  kind  is  not  at  all 
likely  to  succeed  in  a  country  of  the  large 
population,  varied  interests,  general  intelli- 


Can  Government  Regulate?    159 

gence,  and  common  education  of  the  United 
States,  and  the  attempt  is  not  in  the  least 
likely  to  be  made;  but  there  is  another  type 
of  demagogue  who  might  under  peculiar 
conditions  gain  ascendancy  for  a  time  and  do 
a  vast  deal  of  mischief,  though  such  control 
as  he  could  attain  would  not  last  long.  He 
would  soon  find  himself  a  fallen  idol  in  con- 
sequence of  his  inability  to  fulfil  delusive 
promises.  He  would  set  out  as  the  reformer 
of  real  abuses,  the  leader  of  a  crusade  against 
wrong,  and  the  champion  of  a  change  for  the 
better.  He  would  be  of  an  ardent,  vigorous, 
and  generous  nature,  in  full  sympathy  with 
those  who  suffered  from  injustice  or  the 
oppression  of  those  in  power.  He  would 
indentify  himself  heart  and  soul  with  the 
cause  of  "the  people,"  confident  of  their 
right  and  their  power  to  rule,  and  to  rule 
wisely,  provided  they  accept  his  guidance  and 
entrust  him  with  the  custody  of  their  rights 
and  the  exercise  of  their  power  in  high  office. 
In  his  self-confidence,  in  his  conceit  of  lofty 
motive,  of  exalted  capacity,  and  of  infallible 
wisdom,  innate  in  his  temperament  and 
cherished  in  his  dreams  of  service  to  man- 
kind, he  will  by  his  intense  earnestness 
command  a  great  following.  It  may  be  with 


l6o  Honest  Business 

sincerity  that  he  flatters  the  people  in  the 
belief  that  their  instincts  and  impulses  are 
always  right,  that  their  wishes  are  at  all  times 
in  accord  with  the  highest  wisdom,  and,  if 
they  are  permitted  to  decide  everything  by 
a  majority  vote,  all  will  go  well.  He  may 
regard  the  ends  at  which  he  aims  as  of  such 
supreme  importance  and  his  capacity  for 
attaining  them  so  essential,  that  he  will  stoop 
to  any  means  that  appear  necessary  or  effec- 
tive for  securing  them,  blind  in  the  ardour  of 
pursuit  to  their  actual  turpitude. 

Such  a  demagogue  is  always  a  possibility 
under  a  free  government,  though  the  com- 
^  bination  of  qualities  and  the  concurrence  of 
circumstances  are  not  likely  to  coincide. 
I,  If  that  should  occur  and  such  a  leader  of 
-  discontent  and  desire  for  change  should  arise, 
he  would  probably  be  a  man  who  had  already 
acquired  prestige  in  high  office  and  would 
seek  to  attain  his  object  through  the  party 
which  had  already  honoured  him,  swaying 
its  organisation  to  his  will.  Failing  that, 
he  might  attempt  to  form  a  new  party, 
convinced  of  the  righteousness  of  his  cause 
and  its  ultimate  triumph,  for  which  the  ruin 
of  the  old  party  was  necessary,  and  looking  to 
the  future  for  success.  Such  a  demagogue, 


Can  Government  Regulate?    161 

however  sincere  in  his  delusion  and  however 
able  in  handling  his  resources,  is  hardly  more 
likely  to  succeed  in  this  country  than  the 
other,  and  if  he  should  gain  ascendancy  it 
could  not  last  long;  but  the  agitation,  the 
disruption  and  confusion,  and  the  hasty 
experimenting  with  legislation  and  adminis- 
tration, might  do  a  great  deal  of  harm.  But 
the  subversion  or  perversion  of  representative 
government  would  not  go  far  unchecked. 

Progress  in  popular  government  does  not 
lie  in  the  superior  wisdom  and  capacity  of  any 
one  man.  That  it  does  so  is  the  theory  of 
autocracy,  not  democracy.  It  lies  in  greater 
enlightenment  and  better  training  for  the 
mass  of  citizenship,  in  improvement  of  the 
organisation  and  conduct  of  political  parties 
through  those  who  constitute  them,  in  an 
orderly  advance  in  public  sentiment  and 
popular  action.  For  this  there  must  be 
large  co-operation  of  many  forces  working 
steadily  forward,  and  not  a  tumultuous  follow- 
ing of  some  self-constituted  champion  of  high 
pretensions  and  loud  claims.  Safe  progress  is 
slow  and  laborious,  and  in  making  reforms 
we  must  hold  fast  that  which  is  good  and 
build  upon  it  with  care. 

"Government  of  the  people  by  the  people 


162  Honest  Business 

for  the  people"  is  yet  far  from  highly  de- 
veloped in  this  country  and  the  results  are 
far  from  satisfactory.  Has  it  been  showing  a 
promising  advance  in  recent  years?  Many 
think  it  has  been  losing  ground.  Its  difficul- 
ties have  increased  with  the  growth  of  the 
nation  in  population  mainly  because  the  ac- 
cretions have  been  drawn  so  largely  from  the 
lower  grade  of  the  peoples  of  other  countries, 
not  the  "scum"  or  the  "dregs,"  but  in  great 
measure  the  less  capable  of  the  industrial 
class,  the  ill-educated  and  illiterate,  who 
are  valuable  for  labour  but  poor  material  for 
citizenship.  Meantime  the  complex  develop- 
ment of  industries  and  trade  has  increased 
the  difficulty  of  the  problems  to  be  dealt  with. 
The  haphazard  way  in  which  the  growth  and 
development  have  been  allowed  to  go  on  with- 
out regulation,  restraint,  or  supervision,  under 
the  impulse  of  individual  self-interest  and 
ambition  for  success,  with  the  strong  crowd- 
ing forward  and  trampling  on  the  weak  when 
they  are  in  the  way,  has  added  to  the  com- 
plexity and  intricacy  of  the  situation. 

All  this  is  the  result  of  rapid  growth  in  a 
land  of  vast  extent,  resources,  and  possibili- 
ties, discovered  and  occupied  by  civilised 
men  at  a  late  period,  but  at  a  time  when 


Can  Government  Regxilate?    163 

their  civilisation  was  crude  and  brutal. 
There  has  been  a  huge  collecting  of  the 
elements  and  materials  of  a  great  nation  at  a 
rate  too  fast  for  careful  and  progressive 
building,  and  there  is  much  to  be  done  in 
working  it  into  shape  for  symmetry,  strength, 
and  endurance.  On  the  whole  the  material 
is  good  and  the  making  of  the  nation  is  not 
a  hopeless  task,  but  it  must  be  progressive. 
What  has  been  accomplished  is  not  to  be  torn 
down  or  abandoned  but  to  be  corrected,  ad- 
justed, and  added  to.  The  point  has  been 
reached  where  the  people  must  do  more 
through  the  agencies  of  government,  because 
many  things  that  need  to  be  done  cannot  be 
accomplished  by  private  effort,  individual, 
collective,  or  co-operative.  The  people  as  a 
whole,  through  political  organisation  and 
associated  action  upon  tried  principles,  must 
use  the  government  machinery  to  produce 
results  which  cannot  be  attained  in  any  other 
way;  and  among  these  must  be  the  regulation 
of  capital  organised  for  efficiency  in  its  work, 
and  the  regulation  of  labour  organised  for 
efficiency  in  its  work  and  for  protection 
against  the  power  of  organised  capital;  and 
above  all,  the  regulation  of  the  relation 
between  these  two  organised  forces  in  a  way 


164  Honest   Business 

to  secure  justice  for  both  and  to  safeguard 
the  rights  and  the  well-being  of  the  great 
community  of  interests  of  which  they  are  a 
part. 

The  people  are  ill-fitted  for  the  tremen- 
dous task  of  self-government  in  the  United 
States.  Many  mistakes  have  been  made  and 
will  be  made,  but  the  task  cannot  be  given  up. 
It  will  have  to  be  performed  through  the 
political  organisations  and  by  the  choice  of 
delegates  and  representatives,  officers  and  ser- 
vants of  the  people,  fitted  for  the  functions  and 
duties  assigned  to  the  government.  There 
must  be  leading  minds  and  guiding  charac- 
ters, but  the  business  must  not  be  left  to  self- 
seeking  "bosses"  and  party  "machines" 
controlled  and  directed  by  them.  It  must 
not  be  turned  over  to  some  one  "great  man" 
to  take  care  of,  even  though  he  consider 
himself  equal  to  the  task  and  persuade  him- 
self and  others  that  he  is  by  some  divine 
dispensation  the  incarnation  of  the  people's 
will  and  the  embodiment  of  their  power,  act- 
ing only  for  them  and  in  response  to  their 
inspiration.  There  is  no  such  easy  way  to 
the  salvation  of  popular  self-government ;  but 
the  people  must  be  fitted  to  exercise  it,  not 
by  the  wisdom  and  capacity  of  each  and 


Can  Government  Regxilate?    165 

all  for  rule,  but  by  their  ability  and  willing- 
ness to  choose  as  their  instruments  men 
highly  qualified  for  their  work.  The  work 
must  be  done  and  it  must  be  well  done,  if 
free  institutions  are  to  survive.  More  gov- 
ernment and  not  less  will  be  required  as  the 
conditions  of  society  become  more  complex; 
and  if  it  fails  in  the  hands  of  all  the  people, 
it  will  pass  into  the  keeping  of  the  strong  who 
have  much  at  stake  and  who  can  by  combi- 
nation wield  sufficient  power  for  its  defence. 


XIII 

MAKING  GOVERNMENT  MORE   EFFICIENT 

THE  chief  weakness  of  popular  govern- 
ment in  the  United  States  comes  from 
a  great  mass  of  uneducated  or  defectively 
educated  citizens  who  exercise  the  right  of 
suffrage.  These  do  not  constitute  a  major- 
ity; but,  with  the  division  into  parties  on 
certain  lines  of  policy,  in  the  main  between 
those  of  liberal  or  progressive  tendencies  and 
those  of  conservative  or  reactionary  tend- 
encies, they  hold  the  balance  of  power  with- 
out capacity  for  its  intelligent  and  honest 
exercise.  Many  are  of  foreign  birth  or 
parentage.  Some  are  dull  and  stupid,  more 
are  ignorant,  and  many  have  defective  moral 
sense.  It  may  be  said  that  those  of  alien 
origin  are  too  easily  made  naturalised  citizens 
with  the  same  political  rights  as  natives. 
With  equal  justice  it  may  be  said  that  many 
natives  of  mature  years  are  ill-qualified  for 
exercising  the  right  of  suffrage;  but  that  right 

1 66 


MaKing  Government  Efficient    167 

cannot  be  taken  away  from  those  who  are 
born  to  it  or  upon  whom  it  has  been  conferred, 
and  it  is  difficult  to  draw  a  clear  and  firm 
line  of  restriction. 

More  practicable  than  stricter  rules  for 
naturalisation  and  for  qualification  of  the 
suffrage,  is  a  better  education  for  the  exer- 
cise of  the  right  of  suffrage.  It  is  not  alto- 
gether a  matter  of  degrees  of  intelligence  or 
intellectual  capacity.  Those  of  humble  men- 
tal equipment  are  often  better  qualified  to 
exercise  a  political  choice  than  those  of 
keener  perceptions  and  larger  capacity.  That 
balance  of  faculties  known  as  common-sense 
is  as  likely  to  appear  in  those  of  moderate 
mental  equipment  as  in  those  of  large  endow- 
ment, who  are  often  one-sided  or  badly  bal- 
anced. Persons  of  actual  genius  in  some 
particular  line  or  within  a  narrow  range  are 
apt  to  be  defective  in  judgment  of  ordinary 
affairs.  Able  men  absorbed  in  some  exact- 
ing pursuit,  in  which  they  are  exceptionally 
successful,  become  so  "  subdued  to  what  they 
work  in"  as  to  lose  their  sense  of  perspective 
and  proportion,  and  to  belittle  everything 
outside  of  their  special  range.  Where  they 
do  not  consciously  sacrifice  everything  else 
to  their  own  particular  interests  they  regard 


i68  Honest   Business 

these  as  of  such  importance  that  they  con- 
found them  with  the  interests  of  the  com- 
munity at  large.  They  get  the  notion  that 
the  general  prosperity  is  bound  up  with  their 
own  success  or  can  only  be  attained  in  their 
way. 

It  is  far  from  certain  that  if  the  suffrage 
were  limited  to  men  of  intelligence,  tested 
by  education  or  the  possession  of  property, 
the  results  under  representative  government 
would  be  better  than  with  what  is  usually 
meant  by  universal  manhood  suffrage. 
Human  nature  is  as  selfish  in  its  upper  ranks 
as  in  the  lower  and  has  stronger  incentives 
for  subordinating  the  general  good  to  the  self- 
interest  of  individuals  or  allied  groups  of 
individuals  working  together  for  what  they 
consider  best  for  themselves  and  everybody 
else.  Power  is  safer  in  the  hands  of  the  many 
than  in  the  hands  of  the  few,  provided  the 
average  of  intelligence  and  of  training  of  the 
faculties  is  well  maintained.  Everywhere 
there  is  need  of  educating  the  rising  genera- 
tion for  the  duties  of  life,  including  the  duties 

citizenship. 

That  is  generally  acknowledged  in  this 
country  and  liberal  provision  is  almost  every- 
where made  for  the  education  of  the  "com- 


MaKing  Government  Efficient    169 

mon  mind";  but  where  this  education  is  not 
deficient  it  is  almost  always  defective. 
Nowhere  is  it  more  important  to  recognise  the 
inequality  of  human  beings  than  in  the  effort 
to  develop  and  discipline  the  faculties  and 
qualities  with  which  they  are  born,  and  to 
prepare  them  when  young  for  the  life  that  is 
before  them.  It  is  not  a  matter  of  difference 
of  social  station  or  environment  or  the  pecuni- 
ary circumstances  of  parents,  but  difference 
of  natural  endowment  and  capacity.  Some 
of  the  best  material  may  be  in  the  lower  ranks 
socially,  and  some  of  the  poorest  may  be 
in  the  higher.  So  far  as  education  is  under 
public  control  the  accidental  and  adventi- 
tious differences  of  society  should  be  dis- 
regarded and  the  best  use  should  be  made  of 
all  the  material  at  hand. 

" Learning"  is  important  and  the  gathering 
of  knowledge  of  many  things  may  be  desir- 
able, but  the  training  of  the  mind  and  the 
discipline  of  character  is  vastly  more  impor- 
tant. Knowledge  may  be  power,  but  only  if 
one  knows  how  to  use  it.  It  is  a  beneficent 
power  only  if  one  is  able  and  disposed  to  use 
it  for  the  benefit  of  others  as  well  as  himself. 
Capacity  for  effective  action  is  a  greater 
power  than  wide  and  varied  information. 


I/O  Honest    Business 

Education  should  be  directed  to  enabling 
its  recipients  to  make  the  best  use  of  their 
faculties.  It  is  a  mistake  to  subject  all 
children  to  one  uniform  ^plan  of  instruction 
without  regard  to  differences  of  capacity  and 
tendency.  They  should  be  taught  individu- 
ally or  in  groups  formed  with  reference  to 
those  differences,  though  it  may  require  more 
teachers  and  more  time.  The  greater  expense 
would  yield  a  far  larger  return  in  results. 
There  is  no  calling  in  life  of  greater  import 
than  that  of  teaching  and  training  the  young. 
After  the  earlier  years  and  a  fair  test  of 
capacities  and  tendencies  there  should  be  a 
steady  differentiation  with  a  view  to  the 
most  effective  development.  This  does  not 
necessarily  mean  along  the  lines  of  least 
resistance;  but  forcing  against  resistance  is 
useless.  Guidance  and  stimulus  to  over- 
come difficulties  and  gain  strength  where 
there  is  weakness  is  desirable  so  far  as 
practicable,  but  there  must  be  leading  rather 
than  driving.  There  is  much  dispute  over 
beginning  early  to  educate  for  callings  in 
life.  It  depends  upon  differences,  which 
must  be  observed  and  studied.  There  are 
few  who  are  destined  to  become  scholars. 
The  capacity  and  tendency  of  these  may  be 


MaKingf  Government  Efficient    171 

recognised  comparatively  early  and  may  be 
encouraged ;  but  it  is  useless  to  try  to  develop 
them  where  they  do  not  exist.  There  are 
more  who  will  not  only  accept  a  training 
toward  the  callings  known  as  "learned  pro- 
fessions" or  technical  vocations  of  a  higher 
grade,  but  will  desire  it.  There  is  no  reason 
why  education  should  not  be  directed  toward 
the  desired  goal,  though  some  may  change 
their  inclination  afterward.  There  is  useful 
discipline  in  any  application  of  the  mind  to 
study  if  properly  directed. 

But  the  greater  number  in  the  schools  will 
inevitably  be  of  moderate  capacity  and 
destined  for  the  humbler  walks  of  life.  For 
them  an  industrial  training  may  well  begin 
early  and  be  pursued  systematically  with  a 
view  to  their  "working  for  a  living"  in  the 
way  for  which  they  are  best  fitted  by  nature. 
They  can  be  interested  in  that  in  which 
they  are  most  likely  to  excel,  and  to  be  in- 
terested is  essential  to  progress  in  education. 
The  later  years  at  school  should  be  distinctly 
directed  to  preparing  pupils  for  what  they 
are  to  do.  But  all  along,  in  all  grades  and 
upon  all  lines,  there  is  one  most  important 
purpose  of  education  to  which  least  attention 
is  generally  given.  That  is  the  forming  of 


172  Honest   Business 

jffW"  *"   »••  «——*•»""- 

A  character.  \  There  is  no  culture  so  essential 
to  the  living  child  as  ethical  culture,  no 
training  of  such  consequence  as  moral  train- 
ing, and  nothing  is  less  intelligently  attended 
to  in  the  schools,  especially  the  public 
schools. 

""No  doubt  the  family  is  where  this  kind  of 
education  should  begin  and  be  constantly 
maintained,  but  it  is  often  sadly  neglected 
there.  The  neglect  is  not  confined  to  fami- 
lies of  the  poor  and  the  ignorant,  where 
conditions  are  least  favourable.  Many  poor 
parents  are  more  anxious  about  the  character 
and  conduct  of  their  children  than  those  who 
have  every  advantage  in  the  world.  The  pub- 
lic school  should  not  be  merely  a  place  of 
learning,  or  for  study  of  a  variety  of  subjects 
more  or  less  useful  or  more  or  less  interesting. 
It  should  be  a  place  for  training  and  disci- 
pline, not  only  of  the  mental  faculties  but 
above  all  of  the  moral  character.  The  in- 
culcation of  the  habit  of  truth  and  honesty 
is  more  important  than  reading,  writing,  and 
arithmetic.  The  development  of  a  sense 
of  honour  and  sound  motives  of  conduct  is 
more  essential  than  geography  and  history. 
The  cultivation  of  high  ideals  is  more  useful 
than  all  science  and  literature.  But  given 


MaKing  Government  Efficient    173 

this  higher  culture,  all  these  things  will 
accompany  or  follow  it  with  far  better 
results  than  if  that  is  neglected. 

This  is  important  for  the  work  of  life  in 
all  its  everyday  walks  and  in  the  relations 
of  men  in  industry  and  commerce.  It  will 
conduce  to  material  success  and  prosperity 
as  well  as  to  personal  satisfaction  and  domes- 
tic and  social  happiness.  But  it  is  of  the 
highest  importance  to  citizenship.  The  evils 
and  defects  in  making  and  administering 
laws  under  democratic  government,  are  not 
due  primarily  to  bad  or  incompetent  men  in 
office,  or  to  selfish  and  dishonest  leaders  or 
"bosses"  in  control  of  political  organisations, 
but  to  the  unenlightened  and  untrained 
electorate,  which  is  supposed  to  be  and  should 
be  the  source  of  power.  The  proverbial 
statement  that  the  stream  will  not  rise 
higher  than  its  source  is  peculiarly  applicable 
to  political  action.  If  bad  or  incompetent^ 
men  get  into  office,  if  selfish  and  dishonest 
men  gain  control  of  party  organisation  for 
their  own  purposes,  the  fault  is  with  the 
people  who  put  them  where  they  are  or 
allow  them  to  get  there.  There  is  no  device 
of  regulation  which  will  raise  the  stream  of  ser- 
vice above  the  level  of  the  spring  of  mastery. 


174  Honest    Business 

Men  of  ability,  of  one  type  or  another,  will 
work  for  control  where  anything  that  they 
desire  can  be  thereby  attained,  be  it  wealth 
or  power,  notoriety  or  prominence  in  the 
public  eye,  or  honour,  dignity,  and  the  respect 
or  admiration  of  their  fellow-men.  The 
crafty  and  subtle,  with  sordid  aims,  will  gain 
control  if  they  can.  Most  capable  men  of 
worthy  character  will  seek  success  in  the 
various  callings  of  private  life  and  they  are 
apt  to  become  so  busy  and  absorbed  as  to 
neglect  their  share  in  the  duties  of  citizenship, 
and  fail  to  make  proper  efforts  to  keep  the 
public  service  in  clean  and  competent  hands. 
The  few  who  are  specially  fitted  for  public 
service,  who  have  taste  and  aptitude  for  its 
duties  and  responsibilities  and  a  laudable  am- 
bition for  the  distinction  which  may  be  won  by 
it,  either  have  to  forego  their  aspirations  or  con- 
tend with  forces  which  are  repugnant  to  them, 
without  the  support  they  ought  to  receive. 
They  are  tempted  to  stoop  to  methods  that 
are  unworthy,  to  attain  success  which  seems 
otherwise  unattainable,  and  many  comprom- 
ise with  conscience  and  honour  on  the  plea 
that  only  thereby  can  they  gain  a  position 
in  which  they  can  at  least  improve  upon  the 
service  which  the  public  is  getting. 


MaKing  Government  Efficient    175 

The  blame  for  the  success  of  the  incom- 
petent or  the  unworthy  and  the  failure  of  the 
competent  and  worthy  in  public  life,  under 
the  representative  system,  lies  at  the  door  of 
the  electorate,  which  is  the  source  of  power 
and  has  the  choice  of  its  instruments.  The 
fault  is  not  so  much  the  ignorance  or  the 
incapacity  of  the  mass  of  people  as  the  lack 
of  right  motives  and  incentive  among  those 
who  have  sufficient  knowledge  and  capacity 
for  civic  duty.  Many  are  indifferent  or  in- 
sensible to  moral  considerations,  and  many 
more  are  in  positive  sympathy  with  sordid 
aims  and  eager  for  a  share,  however  small, 
in  the  fruits  of  corruption.  Great  numbers 
of  citizens  regarded  as  respectable  tolerate 
practices  by  which  they  may  gain,  or  avoid 
sacrificing  something  which  they  covet.  The 
prevailing  ethical  standard  is  at  fault. 

Hence  the  importance  of  laying  special 
stress  upon  ethical  culture  in  all  schools  in 
which  the  young  are  taught,  from  the  kin- 
dergarten to  the  university.  It  is  hard  to 
convert  or  transform  the  mature  generation. 
In  fact,  it  is  to  all  intents  and  purposes 
impossible,  and  the  influence  that  can  be 
exerted  to  change  its  course  is  but  small. 
But  a  new  generation  can  be  made  to  grow 


176  Honest    Business 

up  to  a  different  maturity  and  a  higher 
character,  by  taking  it  at  its  start  and  apply- 
ing to  it  the  influences  of  the  higher  standard 
through  competent  and  faithful  teachers. 
Only  thereby  can  the  "prevailing  standard" 
be  raised  in  private  life  and  in  public  life,  in 
the  relations  of  society,  in  business,  and  in 
politics.  Three  generations  under  a  sound 
system  of  education,  faithfully  applied  by 
wise  teachers,  would  regenerate  the  world. 


XIV 
HOW  GOVERNMENT'S  OWN  BUSINESS  is 

DONE 

'""THERE  is  no  business  in  which  efficiency, 
1  economy,  and  integrity  are  more  essen- 
tial than  that  public  business  which  the 
government  itself  must  conduct;  and  there 
is  no  business  of  a  legitimate  character, 
on  whatever  scale,  in  which  those  qualities 
are  so  generally  lacking.  It  is  the  people's 
business;  and,  whether  they  realise  it  or  not, 
they  pay  all  its  expenses.  All  the  people  pay 
the  cost,  not  some  of  them,  and  all  suf- 
fer loss  in  so  far  as  the  service  is  defective, 
misdirected,  or  extravagant.  The  United 
States  Senator  who  said  a  few  years  ago 
that  a  capitalised  business  organisation  in  the 
hands  of  competent  men  could  manage  the 
government  business  better  than  it  is  now 
done  at  a  cost  thirty  per  cent,  less,  or  with  an 
annual  saving  of  $300,000,000,  was  not  far 
out  of  the  way. 

12  177 


178  Honest    Business 

And  yet,  while  members  of  Congress  and 
administrative  officers  are  arraigning  those 
who  organise  and  direct  corporations  and 
combinations  of  capital  for  private  or  "quasi- 
public"  enterprise  on  a  large  scale  for  defects 
in  their  methods  or  for  unscrupulous  con- 
duct, and  are  endeavouring  to  regulate  their 
manner  of  doing  business,  efforts  to  correct 
defects  in  the  direct  public  service  are  almost 
always  baffled  and  defeated.  It  is  not  in- 
tended to  imply  that  the  methods  of  private 
business  are  not  often  deserving  of  condem- 
nation and  in  need  of  regulation  by  public 
authority,  or  that  this  may  not  be  made 
effective.  The  faults  in  private  business  are 
mainly  due  to  the  instinct  of  selfishness  and 
the  desire  for  gain,  but  these  are  also  the 
mainspring  of  its  efficiency  and  its  economy, 
which  are  far  superior  to  those  displayed  in 
the  conduct  of  government  business,  while 
its  integrity  or  honesty  is  only  in  exceptional 
cases  inferior. 

The  inferiority  of  government  methods  of 
doing  business  is  due  to  as  natural  causes  as 
is  the  superiority  of  private  methods;  but  the 
defects  of  human  nature  work  in  a  different 
way.  Those  who  seek  and  obtain  the  com- 
manding positions,  so  far  as  it  depends  upon 


Government's  Business         179 

their  own  efforts,  are  inspired  mainly  by 
ambition,  a  craving  for  prominence,  and  a 
love  of  power,  rather  than  by  a  desire  for  gain 
or  profit.  It  is  not  to  be  denied  that  in 
many  cases  there  is  a  consciousness  of  ability 
to  serve  the  public  in  office  and  a  patriotic 
desire  to  do  so  with  efficiency  and  fidelity. 
That  is  an  element  which  enters  into  the 
politician's  aspiration  in  varying  degrees  and 
affects  his  conduct  when  he  attains  office ;  but 
it  is  rarely  predominant  except  in  a  few 
conspicuous  positions  of  high  honour,  and 
there  it  meets  with  obstacles  and  difficulties 
which  often  defeat  its  purposes  in  spite  of  the 
best  efforts. 

In  the  ranks  of  the  service  below  the 
responsible  heads,  the  motives  for  keen  in- 
terest in  the  work,  for  sustained  effort,  for 
efficiency,  and  for  attention  to  economy  of 
cost,  are  weak  or  altogether  wanting.  Those 
who  are  doing  the  work  have  nothing  to  gain 
by  it  beyond  their  salaries,  except  it  be 
promotion  to  better  places,  and  the  oppor- 
tunity for  that  is  not  sufficient  to  inspire 
continuous  effort  in  most  men.  The  tend- 
ency is  to  "take  things  easy"  and  get  along 
as  comfortably  as  possible  and  retain  the 
places.  The  more  secure  the  places  are  made 


i8o  Honest    Business 

by  civil  service  rules,  the  more  likely  is  that 
to  be  the  case,  though  that  does  not  make  the 
rules  less  desirable  for  quite  other  reasons. 
But  the  actual  fact  is  that  in  government 
business,  the  most  effective  motives  for 
constant  attention  to  duty,  vigilance,  and 
fidelity  in  performance  are  lacking. 

The  result  is  a  general  inefficiency  which 
makes  the  employment  of  a  much  larger  force 
of  men  necessary  to  perform  the  same  work 
than  would  be  required  by  a  great  corpo- 
ration. There  is  less  attention  to  details, 
which  causes  waste  and  loss  and  makes 
economy  impossible.  There  also  enters,  in 
spite  of  civil  service  regulation  and  rules, 
the  influence  of  politics,  or  rather  of  politi- 
cians. In  their  several  States  and  districts 
these  men  enlist  in  their  support  many  who 
themselves  desire  public  employment  and 
who  expect  reward  for  their  efforts  in  help- 
ing to  get  legislators  chosen  and  adminis- 
trative officers  elected  or  appointed.  There 
are  many  more  seeking  places  than  there  are 
places  to  be  filled  and  one  inevitable  conse- 
quence is  an  unnecessary  multiplication  of 
places. 

This  aggravates  the  tendency  to  ineffi- 
ciency in  the  individual  public  servant,  and  to 


Government's  Business         181 

a  disregard  for  economy  in  the  cost  of  serv- 
ice. It  makes  a  large  requirement  of  rules 
and  processes  seem  necessary,  not  only  to 
keep  the  numerous  force  occupied,  but  to 
guard  against  the  results  of  carelessness  and 
error,  if  not  of  actual  dishonesty.  In  short, 
the  result  is  a  complex  bureaucracy,  a  vast 
deal  of  circumlocution  and  reduplication,  and 
enormous  webs  and  tangles  of  "red  tape," 
which  would  not  be  tolerated  in  private  busi- 
ness or  would  lead  to  speedy  bankruptcy  if 
they  were.  There  is  no  monopoly  like  that 
of  the  government  business,  and  none  so 
beset  with  the  evils  which  monopoly  breeds. 
The  more  that  business  grows  the  greater  the_ 
evils  will  be,  unless  a  remedy  is  found.  The 
only  remedy  lies  in  a  full  comprehension  of 
the  condition  on  the  part  of  the  people  who 
pay  for  all  the  waste  and  cost  and  suffer 
all  the  consequences,  and  an  insistence  of 
public  opinion,  backed  by  public  action,  that 
this  business  be  better  managed  and  at  less 
cost. 

How  is  the  result  to  be  attained  over  the 
resistance  of  an  intrenched  bureaucracy,  with 
a  powerful  party  organisation  behind  it? 
This  question  is  never  altogether  neglected. 
There  have  been  many  committee  inquiries 


182  Honest    Business 

into  details  here  and  there.  There  have 
been  efficiency  commissions  created  to  hunt 
through  departments  and  bureaus  and  divi- 
sions for  defective  methods  and  to  suggest 
improvements,  with  a  view  to  simplifying 
processes  and  making  them  more  effective, 
reducing  expenses,  and  preventing  waste. 
They  have  had  adequate  power  for  obtaining 
evidence,  examining  books  and  accounts, 
and  compelling  testimony.  They  have  had 
no  difficulty  in  finding  defects  and  making 
recommendations.  They  have  turned  in  re- 
ports, which  make  a  temporary  stir  and  then 
repose  in  pigeonholes,  while  the  same  old 
decrepit  system  goes  maundering  on. 

A  new  head  of  the  administration,  whether 
national,  state,  or  municipal,  may  come  in 
pledged  to  "reform"  and  determined  to  have 
it.  Heads  of  departments  and  even  some  of 
the  continuing  deputies  and  heads  of  bureaus 
who  cannot  be  dispensed  with,  may  sym- 
pathise with  the  purpose,  but  they  soon  come 
up  against  the  intrenchments  of  the  system 
and  find  them  almost  insurmountable  and 
immovable.  At  the  national  capital  and  the 
chief  offices  of  the  government  elsewhere  there 
is  a  virtually  invincible  inertia.  Investigat- 
ors are  welcomed,  grudgingly  or  indifferently, 


Government's  Business         183 

and  allowed  to  see  the  wheels  go  round. 
These  must  keep  going.  Government  cannot 
stop.  The  machinery  is  gauged  and  cogged 
and  connected  in  a  way  that  everybody  is  used 
to,  and  it  will  not  do  to  shift  it.  At  all  events 
nobody  in  charge  is  disposed  to  help  to  change 
it.  Heads  of  divisions  do  not  wish  to  be 
hindered  in  their  routine  or  bothered  with 
overhauling,  or  run  the  chance  of  being 
dispensed  with. 

Heads  of  departments  may  be  anxious  to 
do  something  and  may  issue  orders  and 
instructions.  Then  comes  a  fear  of  cutting 
down  the  force  and  losing  places,  of  inter- 
ference with  profitable  contracts,  of  disturb- 
ance of  established  methods  to  save  expense, 
which  will  cause  a  lot  of  trouble.  There  is  no 
spirit  of  co-operation  to  secure  improvements 
which  none  but  those  in  high  position  seem  to 
care  for,  and  to  which  the  rank  and  file  of  the 
service  is  stolidly  opposed.  If  real  efforts 
are  made  and  the  menace  of  change  becomes 
serious,  there  is  the  resort  of  the  bureaucrats 
and  department  heads  to  their  Congressmen. 
Changes  may  require  legislative  action  or 
authority  for  applying  funds,  and  somehow  it 
proves  from  month  to  month  that  there  is 
1 '  nothing  doing. ' '  The  public  seems  to  know 


184  Honest    Business 

and  care  little  about  it,  and  unless  some  kind 
of  an  outbreak  occurs,  such  as  flagrant 
customs  frauds  or  scandal  involving  a  big 
sum  of  money,  or  some  conspicuous  official 
turpitude,  it  will  forget  what  all  the  stir 
was  about,  until  there  comes  another  change 
of  administration  or  a  new  spasm  for  reform- 
ing abuses  in  the  government's  business,  as 
well  as  in  that  of  everybody  else. 

If  it  is  the  people's  business,  what  are  the 
people  going  to  do  about  it?  First,  they 
need  to  realise  more  fully  that  it  is  their 
business,  that  they  are  paying  all  the  cost 
and  bearing  all  the  burden,  and  that  they  are 
deprived  of  something  that  belongs  to  them 
and  having  their  life  made  harder.  For 
the  most  part  those  who  are  employed  in  the 
government  business  are  producing  nothing. 
So  far  as  their  work  does  not  help  the  pro- 
ductive labour  of  others  and  make  the  output 
larger  or  better  or  safer  than  it  would  other- 
wise be,  so  far  as  it  does  not  contribute  to  the 
welfare  of  the  people  or  the  wealth  of  the 
nation,  it  is  wasted.  So  far  as  there  is  any 
waste  in  their  manner  of  doing  the  business, 
so  much  is  unnecessarily  taken  from  what  the 
rest  of  the  people  are  producing  and  the  share 
that  is  left  for  their  own  use  is  diminished. 


Government's  Business         185 

That  ought  to  be  plain  enough  to  the  simplest 
understanding.  The  cost  of  government  is 
thereby  made  a  factor  in  the  general  cost  of 
living,  for  what  that  uses  up  takes  from  what 
there  is  for  general  distribution. 

When  we  take  into  account  all  the  cost 
of  local  and  municipal  governments  and  of 
state  and  national  government,  this  is  no 
small  item.  This  cost  is  paid  out  of  what  is 
produced  by  industry  and  distributed  in 
trade,  and  it  diminishes  by  so  much  what 
reaches  the  consumer  for  his  use  and  what 
can  be  added  to  savings  and  investments. 
It  constitutes  what  is  called  "the  burden  of 
taxation."  Who  bears  that  burden?  The 
fact  that  it  is  diffused  over  the  backs  of  the 
people  and  they  have  to  carry  it,  and  is  not 
borne  only  by  those  who  pay  tax  bills,  is  one 
of  the  things  which  are  not  sufficiently 
appreciated.  Methods  of  taxation,  the  "in- 
cidence" of  taxes,  the  diffusion  of  the  effect 
are  subjects  of  a  complex  and  rather  arid 
chapter  in  economics,  not  at  all  entertain- 
ing to  most  people  and  some  of  it  not  readily 
understood.  We  do  not  need  to  venture  into 
more  than  the  outskirts  of  the  wilderness  to 
see  clearly  enough  that  nobody  can  escape 
taxes  any  more  than  he  can  escape  death, 


i86  Honest   Business 

and  consequently  everybody  has  an  interest 
in  having  the  business  of  government  con- 
ducted efficiently,  economically,  and  honestly. 

Suppose  taxes  are  levied  directly  upon 
property.  If  it  is  improved  real  estate  the 
owner  pays  them ;  but,  if  he  uses  the  property 
himself  for  productive  purposes  the  taxes 
enter  into  the  expenses  of  his  business.  He 
does  not  seek  any  less  profit  because  the 
payment  goes  to  the  government,  and  so  far 
as  it  is  in  his  power  he  makes  up  for  that 
expense  by  higher  prices  for  what  he  sells. 
His  customers  pay  at  least  their  full  share. 
If  he  rents  or  leases  the  property  to  another  he 
gets  the  taxes  back  from  the  tenant  in  a 
higher  rent  than  he  would  otherwise  charge, 
and  the  tenant  passes  it  along,  or  the  bulk 
of  it,  to  the  customers  in  his  prices.  The 
consumer  pays.  If  it  is  residence  property, 
the  rent  is  so  much  the  higher  on  account  of 
the  landlord's  taxes  and  they  enter  into  the 
tenant's  cost  of  living.  The  poorest  occupant 
of  a  flat  or  a  tenement  is  indirectly  the  tax- 
payer. He  helps  to  support  the  govern- 
ment. 

If  the  tax  is  laid  upon  personal  property 
in  possession,  it  is  directly  felt;  but  there  is 
usually  an  exemption  of  a  moderate  amount, 


Government's  Business         187 

so  that  those  in  modest  or  humble  circum- 
stances do  not  pay.  It  is  a  tax  easily  evaded 
and  is  very  unequally  collected  from  those 
who  are  legally  subject  to  it.  The  scrupulous 
pay  while  the  dishonest  escape  much  of  the 
burden.  If  it  is  upon  goods  in  the  hands  of 
manufacturers  or  dealers,  so  far  as  it  is  actu- 
ally collected  at  all  it  is  reckoned  in  the 
expenses  of  the  business  and  added  to  prices. 
Again  it  reaches  the  consumer  and  affects 
his  cost  of  living.  If  it  takes  the  form  of 
a  license  fee  or  a  charge  for  the  privilege  of 
doing  any  kind  of  business,  it  has  a  like  effect. 
It  may  be  used  for  the  purpose  of  restricting  a 
business  which  is  regarded  as  injurious  rather 
than  beneficial,  like  liquor  selling,  and  it  may 
not  matter  that  the  consumer  pays. 

There  are  other  subsidiary  purposes  that  it 
may  be  made  to  serve.  Taxes  in  the  special 
form  of  customs  duties  are  levied  upon 
imported  foreign  goods.  These  are  col- 
lected at  the  ports  of  entry  and  paid  by  the 
importers,  but  we  may  be  sure  that  they  are 
fully  added  to  the  prices  at  which  the  goods 
are  sold  and  the  last  buyer  has  no  further 
recourse.  He  is  the  ultimate  consumer. 
Many  of  these  foreign  goods  compete  in  the 
markets  with  domestic  products,  in  most 


i88  Honest   Business 

cases  products  of  manufacturing  industry. 
The  duties  are  sometimes  made  heavy  for  the 
very  purpose  of  protecting  the  domestic  pro- 
ducer against  the  competition  and  enabling 
him  to  maintain  high  prices  for  his  own  profit. 
Whether  or  not  this  policy  is  justified  for  the 
encouragement  and  support  of  American 
industry,  there  is  no  doubt  about  who  ulti- 
mately pays  the  duties  and  the  extra  prices 
for  domestic  goods.  If  the  dutiable  foreign 
goods  are  bought  for  use  or  consumption,  it  is 
plain  enough  that  the  extra  cost  on  account 
of  the  duties  appears  in  the  selling  prices  and 
the  last  buyer  pays.  If  competing  domestic 
goods  are  higher  in  price  also  as  a  conse- 
quence, it  is  equally  plain  that  the  consumer 
pays  the  difference.  He  "feels  it"  in  his 
cost  of  living  whether  he  is  conscious  of  the 
cause  or  not. 

If  the  protective  policy  is  justified  as  a 
means  of  encouraging,  developing,  and  main- 
taining domestic  industries  on  a  high  level  of 
profits  and  wages,  there  is  still  no  doubt  that 
the  cost  is  paid  by  the  mass  of  consumers, 
much  the  larger  part  of  whom  do  not  directly 
share  in  the  benefit  of  the  higher  prices  while 
they  help  to  pay  them  from  the  proceeds  of 
their  own  unprotected  industry.  Our  present 


Government's  Business         189 

point  has.  to  do,  not  with  the  wisdom  or  the 
advantage  of  the  policy,  but  with  the  fact 
that  the  people  pay  the  whole  cost  of  sup- 
porting it  and  not  merely  what  goes  to  the 
government  as  revenue  from  customs  duties. 
Corporations  are  favourite  subjects  of 
taxation,  especially  those  engaged  in  the 
"quasi-public  service,"  or  "public  utility 
business"  of  transportation  or  supplying 
light  or  power  with  gas  or  electricity.  They 
are  supposed  to  be  soulless  and  greedy,  and 
not  to  suffer  from  the  exaction.  They  may 
pay  upon  their  property  like  others,  also  for 
their  charter  privileges  and  the  right  to  live 
and  labour  as  organised  beings.  As  corpo- 
rate entities,  they  may  not  feel  it  or  care 
about  it  any  more  than  a  machine,  but  that 
does  not  prevent  the  effect.  If  they  are 
industrial  corporations,  the  taxes  enter  into 
their  expenses  and  are  added  to  their  prices 
just  as  if  they  were  human  beings,  for  they 
have  to  be  managed  by  human  beings.  If 
they  are  railroad  or  public  utility  com- 
panies, they  are  entitled  to  charge  enough  for 
their  services  to  get  a  fair  return  upon  the 
capital  invested  in  them;  and  if  that  is  not 
permitted,  they  cannot  get  the  capital  and 
keep  up  the  service.  In  the  end  what  the 


i')<>  Honest    Business 

government  gets  out  of  them  the  people 
they  serve  have  to  pay.  They  cannot  escape 
without  impairing  the  service  and  losing  more 
some  other  way.  If  the  government  should 
undertake  to  perform  the  service  itself  they 
would  have  to  pay  still  more  and  get  less  in 
the  end. 

There  is  no  use  in  trying  to  get  away  from 
taxation  and  the  cost  of  government.  There 
are  two  forms  of  taxation  which  give  some 
promise  of  relief,  but  they  have  their  own 
drawbacks.  There  is  the  tax  on  land,  apart 
from  the  cost  of  what  is  used  in  connection 
with  it  in  the  way  of  buildings  and  other 
property,  and  from  the  cost  of  making 
use  of  it  for  its  various  purposes.  Nobody 
can  get  along  without  more  or  less  use  of 
land,  and  it  is  a  natural  monopoly.  Nobody 
can  by  his  efforts  create  it  or  increase  the 
supply  in  any  particular  place.  Being  thus 
absolutely  limited  in  quantity,  it  rises  in 
value  as  the  demand  for  its  use  increases, 
and  where  that  demand  is  concentrated  upon 
limited  areas  it  may  rise  very  high,  not  from 
anything  the  possessor  does  or  pays  for  but 
from  the  growth  of  the  community  which 
occupies  it. 

Here  is  an  increment  of  value,  not  created 


Government's  Business         191 

by  the  landowner,  but  by  the  community, 
from  which  the  community  might  derive  a 
revenue  without  injustice  to  the  holder  of 
the  title  or  injury  or  cost  to  anybody  else. 
Private  ownership  of  land  is  an  artificial 
matter,  established  and  protected  by  law. 
How  it  originated  and  became  established  we 
need  not  inquire,  but  present  owners  hold  it 
by  valid  titles  and  have  acquired  it  at  a  cost 
determined  by  conditions  at  the  time  they  got 
possession.  There  are  those  who  contend 
that  all  private  ownership  of  land  is  in  the 
nature  of  unjust  private  monopoly,  and  ad- 
vocate taking  for  the  public,  in  the  form  of 
"economic  rent"  for  its  use,  the  whole  of  the 
artificial  value,  or  "increment  of  value," 
caused  by  the  growth  of  communities  and  the 
demand  for  space  upon  which  to  bestow  la- 
bour and  capital  and  produce  new  values. 
This  would  take  away  from  the  present  owners 
values  which  they  have  paid  for  and  would  be 
equivalent  to  confiscation.  To  put  upon 
land  a  tax  which  would  reduce  its  present 
value  would  be  an  injustice.  But  to  tax 
further  increments  of  value,  due  to  no  effort 
or  expense  of  the  owner  of  the  land,  but  to 
the  growth  of  the  community,  thereby  deriv- 
ing revenue  for  the  benefit  of  the  community 


192  Honest    Business 

and  the  relief  of  taxation  on  productive  prop- 
erty and  productive  effort,  would  be  emi- 
nently just.  Instead  of  adding  to  the  burden 
of  the  people  for  the  support  of  government 
it  would  lighten  it. 

The  other  kind  of  tax  which  people  are 
apt  to  think  they  would  not  feel,  and  which 
would  in  some  measure  lighten  their  burden, 
is  that  upon  incomes  in  excess  of  the  amount 
requisite  for  the  reasonable  needs  of  the 
recipient.  There  would  be  much  to  be  said 
for  this,  if  there  were  not  so  much  to  be  said 
against  the  way  it  works.  If  all  the  people 
were  honest  and  patriotic,  and  disposed  to  do 
their  whole  duty  to  their  fellow-men  and  the 
State  as  well  as  to  themselves,  it  would  work 
all  right.  It  is  a  great  merit  for  a  tax  to  be 
easily  and  cheaply  collected,  so  that  the 
government  gets  readily  all  that  is  due  and 
substantially  all  that  is  taken  from  its  sub- 
jects, with  the  least  loss,  waste,  or  expense  in 
the  process  of  transfer. 

If  people  having  an  income  above  a  certain 
limit  of  exemption,  no  matter  how  derived, 
were  willing  and  glad  to  contribute  as  revenue 
for  the  support  of  the  government  a  small 
percentage  of  the  excess,  increasing  perhaps 
with  the  liberality  of  their  own  income,  and 


Government's  Business          193 

would  make  a  truthful  statement  of  this 
amount  and  promptly  pay  upon  the  self- 
assessment,  it  would  be  so  simple  and  easy,  so 
completely  and  cheaply  collected,  that  every- 
body would  rejoice  and  the  general  burden  of 
taxation  would  be  so  much  lighter.  It  might 
finally  rest  at  one  end  on  the  land  and  at  the 
other  be  borne  up  by  generous  incomes.  But 
there  are  dreadful  drawbacks  about  this 
"system. "  Land  cannot  get  away  or  shrink 
or  shirk  or  hide  itself;  but  incomes  can.  An 
income  tax  is  the  hardest  and  costliest  to 
collect.  It  costs  the  government  a  large 
amount  to  get  it  and  the  complexity  of  the 
system  of  assessment  and  collection  makes 
it  cost  those  subject  to  it  a  great  deal  to  pay  it, 
in  addition  to  what  the  government  gets. 
When  all  is  done,  it  is  inadequately  and 
unequally  collected.  There  is  much  evasion 
as  well  as  vexation.  The  effect  upon  individ- 
ual and  national  character  is  demoralising  and 
there  is  no  treasure  of  individual  or  nation  so 
precious  as  integrity  of  character. 

Nor  is  an  income  tax  wholly  without  a 
burdensome  effect  upon  the  industries  and 
business  of  the  country.  It  draws  upon 
invested  capital  and  capital  available  for 
investment.  It  takes  somewhat  from  pro- 


194  Honest    Business 

fit,  and  we  may  be  sure  that  those  who  have 
to  pay  it  pass  it  along  just  so  far  as  they  can 
in  increased  rents,  increased  prices,  and 
increased  charges  for  service  rendered  with 
invested  capital.  A  few  make  the  actual 
payments,  and  the  rest  think  they  do  not  feel 
it.  They  do  not  feel  it  perceptibly  or  con- 
sciously, but  they  do  not  wholly  escape  the 
effect.  There  is  one  serious  disadvantage  in 
having  the  substance  of  values  in  any  form 
drawn  from  the  people  indirectly  for  the 
support  of  the  government  without  being  felt. 
It  is  calculated  to  make  them  indifferent  to 
the  cost  of  the  government's  business,  which 
is  their  business.  It  encourages  extravagance 
and  waste  in  public  expenditures.  It  makes 
more  difficult  the  effort  to  secure  efficiency 
of  service  and  economy  of  expense.  This 
will  tend,  in  spite  of  the  extra  revenue  drawn 
apparently  from  a  rich  or  well-to-do  few,  to 
increase  rather  than  reduce  other  taxation, 
the  burden  of  which  is  felt. 

We  are  forced  to  conclude  that  after  all, 
so  long  as  human  nature  remains  what  it  is 
and  works  in  its  customary  way  with  tax- 
payers and  revenue-devourers,  the  income 
tax  furnishes  on  the  whole  the  least  desirable 
method  of  getting  support  for  the  govern- 


Government's  Business         195 

ment,  if  not  an  absolutely  pernicious  as  well 
as  vexatious  method.  It  is  justified  only 
by  emergencies  to  meet  which  a  sudden  in- 
crease of  revenue  is  imperatively  demanded. 
Very  much  simpler,  more  easily,  surely,  and 
cheaply  collected,  and  equally  prolific,  is  a 
small  stamp  tax  upon  the  multitude  of 
records,  documents,  and  instruments  of  ex- 
exchange  constantly  used  in  the  current  trans- 
action of  business.  This  is  more  widely  felt 
and  appreciated,  but  the  impression  is  so 
slight  as  to  be  virtually  imperceptible. 

The  point  to  be  pressed  horn^  is.  t-.Tia.f-. 
government  business  is  the  people's  business 
ana  tiiey  have  to  pay  its  expense  aruj  suffer 
forits  sliQi^fflipiqffi;  foit  in  so  far  as  it  per- 
tains to  what  cannot  be  successfully  done  by 
private  enterprise  and  co-operation,  we  have 
to  make  the  best  we  can  of  it.  We  can  only 
strive  to  improve  it  by  setting  more  capable 
and  more  honourable  men  to  do  its  work; 
but  if  we  are  wise  we  shall  confine  its  func- 
tions to  legitimate  public  work  which  cannot 
well  be  done  by  private  effort.  We  need  also 
to  guard  vigilantly  against  too  much  med- 
dling, or  any  needless  meddling,  with  business 
that  does  not  belong  to  government.  Efforts 
at  regulation  and  supervision  may  go  too  far 


196  Honest   Business 

or  be  misdirected  and  that  may  be  much  more 
costly  to  the  people  even  than  legislative  and 
official  extravagance  and  waste. 

Politicians  who  get  into  public  office 
under  a  democratic  government  are  seldom 
trained  or  experienced  in  practical  business. 
They  are  not  often  well  versed  even  in  the 
principles  of  commerce  and  finance,  or  capa- 
ble judges  of  their  application.  Beyond 
doubt,  in  the  development  of  large  oper- 
ations in  industry  and  trade  wrongs  and 
abuses  have  grown  up  which  need  to  be  cor- 
rected by  an  exercise  of  public  authority  and 
the  recurrence  of  which  needs  to  be  pre- 
vented. This  may  require  a  watchful  super- 
vision and  prompt  means  of  correction;  but 
within  the  limits  of  lawful  action  there  must 
be  freedom  from  official  restraint  and  meddle- 
some directing  or  dictation,  if  there  is  to  be 
successful  business  and  general  prosperity. 
Men  with  a  natural  talent  and  aptitude 
for  industrial  and  commercial  pursuits,  who 
are  trained  and  experienced  in  them  and 
have  their  personal  interest  bound  up  in  their 
success,  are  far  better  judges  of  their  require- 
ments than  members  of  legislative  bodies  or 
official  boards;  and,  as  a  rule^Jhey  arg 


inferior  in  integrity  of  character  and^ense 


Government's  Business         197 

of  honour.  The  ablest  and  most  upright"^ 
ImTnotTess  concerned  for  the  public  welfare,  / 
for  they  know  that  what  is  best  for  that  is  / 
best  for  themselves  in  the  long  run. 

An  officious  regulation  and  supervision  of 
the  organisation  and  operation  of  business 
enterprise  in  any  of  its  various  branches, 
though  it  may  be  provoked  by  a  tendency  to 
excesses  and  abuses  and  may  be  well  inten- 
tioned,  will  inevitably  hinder  and  embarrass 
and  can  only  do  harm,  not  merely  to  those 
who  are  actively  conducting  the  business, 
but  to  all  who  are  employed  in  it  and  whose 
wants  are  supplied  by  it.  Business  must 
have  reasonable  freedom  of  action,  which 
means  complete  freedom  except  for  doing 
wrong,  if  it  is  to  thrive.  If  hampered,  hin- 
dered, and  embarrassed  in  using  the  means 
necessary  to  obtain  and  apply  capital  and 
labour  and  to  get  the  most  fruitful  results, 
the  consequence  will  be  restricted  produc- 
tion, costly  distribution,  high  prices,  and 
impaired  prosperity.  Nobody  will  escape 
the  effect. 

There  is  no  occasion  to  go  into  detailed 
discussion  to  prove  this.  As  a  general  pro- 
position it  is  easy  to  see  that  it  must  be  so, 
for  the  highest  welfare  depends  upon  the 


198  Honest    Business 

greatest  abundance  at  the  least  cost,  with 
equitable  distribution.  Whatever  interferes 
with  that  impairs  the  general  well-being. 
What  needs  to  be  pressed  upon  the  attention 
is  the  universality  of  the  injury.  It  affects 
labour  as  well  as  capital,  and  diminishes 
saving  and  the  accumulation  of  wealth.  We 
do  not  mean  accumulation  of  wealth  in  a 
few  hands  or  by  any  favoured  class,  but  for 
the  people  at  large.  Whence  comes  most  of 
the  accumulated  capital  in  this  country? 
Who  are  the  investors?  Who  receive  the 
usufruct  from  the  investment  of  capital? 
Those  who  propose  stringent  measures 
of  regulation  and  restraint  are  apt  to  think 
only  of  what  they  term  the  "capitalistic 
class,"  but  a  large  part  of  the  accumulated 
savings  invested  in  the  securities  of  corpora- 
tions come  from  wage-earners  and  persons  of 
small  means.  There  is  about  $7,000,000,000 
deposited  in  savings  banks  in  the  United 
States  and  nearly  twice  as  much  held  in  the 
funds  of  life-insurance  companies,  derived 
from  premiums  upon  their  policies.  The 
bulk  of  these  vast  sums  is  invested  in  securi- 
ties, mainly  those  of  corporations.  Upon 
the  profitable  operation  of  the  corporations 
depends  the  value  of  their  securities,  and 


Government's  Business         199 

the  return  to  savings  depositors  and  the 
beneficiaries  of  life  insurance.  GovernmenT^ 
business  is  the  people's  business,  but  gov- 
ernment organisation  is  not  adapted  to  con- 
trolling or  directing  their  private  affairs. 
Its  only  function  in  relation  to  these  is  to  see 
that  those  engaged  in  it  have  freedom  under 
law  without  abusing  it  to  do  injustice  to 
each  other  or  harm  to  the  public.  If  it  is 
difficult  to  secure  men  in  public  office  who 
are  qualified  to  perform  its  duties  efficiently 
and  honestly  for  the  necessary  purposes  of 
government,  how  much  more  difficult  must  it 
be  to  secure  those  capable  of  directing  and 
guiding  the  general  business  of  the  country! 
With  that  the  government  "trust "or  mo- 
nopoly can  meddle  only  to  mar.  The  people 
must  manage  their  own  business,  and  the 
nearer  they  keep  it  to  their  own  hands  the 
better  they  can  do  it ;  and  the  less  they  try  to 
control  it  through  one  vast  central  organisation 
the  safer  it  will  be. 


XV 

THE  DREADFUL  WASTE  OF  WAR 

OF  all  the  waste  of  human  energy  and 
invention  and  destruction  of  the  fruits 
of  labour  there  is  no  other  comparable  with 
that  entailed  by  the  barbarism  of  war.  No 
nation  is  entitled  to  boast  of  its  Christian 
civilisation,  or  of  any  advanced  civilisation, 
which  engages  in  warfare  with  another, 
unless  driven  to  it  in  self-defence  or  in  defence 
of  vital  interests  of  its  own  or  of  its  citizens 
which  cannot  be  otherwise  vindicated.  It 
takes  from  productive  pursuits  hundreds  of 
thousands  of  able-bodied  and  able-minded 
men,  in  some  cases  millions.  This  curtails 
by  so  much  the  production  which  ministers 
to  the  wants  of  mankind,  and  aggravates  by 
so  much  the  hardships  of  those  who  have 
to  do  the  producing  both  for  themselves  and 
for  the  armies  and  navies.  It  consumes  an 
enormous  amount  of  the  products  of  labour, 
physical  and  mental,  in  armaments,  military 

200 


TKe  Waste  of  War  201 

and  naval  supplies,  and  the  subsistence  of 
fighting  men,  making  so  much  more  scanty 
and  more  costly  the  subsistence  of  those  who 
do  the  work  of  peace.  It  destroys  vast 
values  which  have  been  previously  produced 
and  laid  up  in  property  in  one  form  and 
another,  constituting  national  wealth.  It 
entails  suffering,  bereavement,  and  privation 
upon  thousands  and  thousands  of  families.  It 
greatly  increases  the  cost  of  government,  the 
debts  of  nations,  and  the  burden  of  the  people 
in  taxation.  It  wastes  the  wealth  of  nations 
and  mars  the  welfare  of  peoples.  Those 
who  do  the  daily  work  of  production  pay  for 
it  all  and  get  so  much  less  of  the  fruits  of 
labour  for  themselves. 

These  are  commonplace  statements;  but  it 
is  said  that,  so  long  as  some  nations  are  not 
advanced  in  civilisation,  it  is  necessary  for 
those  which  are  so  to  be  prepared  to  defend 
themselves  and  their  interests  in  the  world 
in  the  most  effective  manner.  They  must, 
therefore,  maintain  powerful  armaments  and 
trained  forces  at  all  times,  and  be  ready  to 
vindicate  their  rights  and  their  honour  at  any 
cost.  Largely  this  is  a  pretext.  What  in- 
duces the  so-called  Christian  nations  of 
Europe  and  America  to  spend  so  much  of 


2O2  Honest    Business 

their  substance  on  armaments  and  the  sup- 
port of  armies  and  navies,  is  not  danger  of 
attack  from  less  civilised  nations,  but  jealousy 
or  fear  of  each  other,  or  disputes  which 
might  be  settled  by  peaceful  methods  with 
as  much  justice  as  human  nature  is  capable 
of  attaining  and  far  more  than  can  be  attained 
by  fighting.  If  these  nations  had  no  designs 
but  justice  for  themselves,  for  each  other, 
and  for  mankind,  they  could  enter  into 
agreements  for  a  peaceful  settlement  of  all 
their  own  differences  in  as  equitable  a  man- 
ner as  is  attainable  on  this  earth.  They 
could  also  insure  the  peace  of  the  world 
against  surviving  barbarism  and  greatly  ad- 
vance civilisation,  at  an  immense  saving  from 
the  cost  of  present  policies.  Discarding  that 
self-interest  which  is  purely  selfish  and  grasp- 
ing or  unwilling  to  concede  the  just  claims 
of  others,  they  could  police  the  world  and 
promote  progress  in  civilisation  and  the  gen- 
eral welfare  of  less  advanced  nations  at  a 
fraction  of  the  cost  of  their  warlike  prepara- 
tions. They  are  not  Christian  nations.  ^They_ 
are  not  highly  civilised^r>nr  not  one. 

R  is  common  to  say  nowadays  that  it  is 
not  the  governments  or  the  ruling  men  of 
nations  who  bring  on  wars,  but  their  unruly 


The  Waste  of  War  203 

subjects  whose  passions  are  aroused  and  who 
have  in  the  end  to  suffer  the  penalties  and 
pay  the  costs.  Men  who  have  the  responsi- 
bility of  directing  governments  and  who 
understand  the  sacrifices  of  war,  we  are  told, 
are  only  anxious  to  avoid  the  necessity  of  it, 
but  something  happens  to  excite  a  whole 
people  to  the  fighting  pitch;  and,  blind  to 
consequences,  they  precipitate  the  nation  into 
conflict.  This  may  happen,  but  who  pre- 
pares the  situation  which  leads  to  exciting 
the  passions  and  arousing  the  warlike  spirit? 
Who  provides  the  means  of  terrible  slaughter, 
cultivates  the  desire  to  use  them,  and  makes 
conquest  a  matter  of  pride  and  glory,  regard- 
less of  the  justice  of  the  cause?  Who  is 
responsible  for  failure  to  provide  the  means  of 
deliberate  and  peaceable  settlement  when 
differences  first  arise  which  are  liable  to  lead 
to  inciting  popular  passion? 

Another  plea  is  often  made,  that  war 
evokes  the  energies  of  a  people,  stimulates 
daring,  cultivates  endurance  and  heroism, 
develops  and  sustains  the  highest  qualities  of 
manhood,  and,  apart  from  other  considera- 
tions, is  worth  what  it  costs,  if  it  does  not  come 
too  often  or  from  unjustifiable  causes.  It  is 
even  contended  that  the  result  is  to  maintain 


204  Honest   Business 

the  activity  and  the  productive  capacity  of 
a  people  in  a  way  to  repair  the  ravages  in  a 
short  time  and  to  promote  the  prosperity  of  a 
nation  in  the  long  run.  The  nations  which 
excel  in  fighting  excel  also  in  the  more  re- 
nowned victories  of  peace,  and  are  the  most 
prosperous  and  wealthy  in  spite  of  their 
burdens.  A  calm  world  and  a  long  peace 
beget  the  cankers  of  degeneration  and  decad- 
ence which  sap  a  nation's  energy  and  threaten 
its  life.  This  is  a  plea  proper  to  a  backward 
civilisation  and  an  argument  which  states 
that  certain  events  are  the  effect  of  others 
because  they  follow  or  accompany  them. 
Things  which  go  together  may  have  different 
or  the  same  causes  without  being  the  causes 
of  each  other. 

In  this  age  is  there  not  enough  to  be  done 
to  develop  energy,  inspire  heroism,  beget 
courage  and  endurance,  incite  emulation  and 
a  noble  ambition,  without  having  men  turn 
against  each  other  with  deadly  weapons  to 
kill  and  mutilate?  There  are  perils  to  over- 
come, dangers  to  face,  wrongs  to  redress, 
benefits  to  achieve,  and  victories  to  win  with  a 
nobler  glory  than  that  of  the  battlefield  or 
the  bloody  deck.  There  are  hosts  of  evils  to 
be  overcome  and  good  to  be  accomplished 


The  Waste  of  War  205 

for  peoples  and  nations,  which  will  contribute 
to  their  gain  instead  of  their  loss.  They  can 
be  kept  from  degeneration  and  decadence  by 
other  means  than  fighting,  if  their  teachers 
and  guides  are  inspired  by  right  motives. 
This  is  not  to  say  that  armies  and  navies  are 
no  longer  needed  and  that  wars  can  be  com- 
pletely prevented.  Human  nature  has  not 
reached  the  stage  for  that,  and  there  are 
still  backward  nations  to  be  reckoned  with. 
The  federation  of  the  world  is  not  yet  at  hand  ; 
but  the  "advanced  nations"  are  in  a  posi- 
tion to  do  much  more  than  they  are  willing  to 
do  for  the  cause  of  universal  peace,  the 
reduction  of  armaments,  the  lessening  of 
the  waste  and  loss,  the  cost  and  sacrifice, 
and  the  burdensome  and  impoverishing 
consequences  of  warfare. 

How  are  they  to  be  induced  to  direct  their 
energies  to  winning  the  victories  of  peace? 
Only  by  an  assiduous  inculcation  of  more 
enlightened  views  of  what  makes  for  the 
welfare  of  people  as  well  as  the  wealth  of 
nations.  More  and  more  governments  must 
act  as  the  agencies  of  the  people's  will.  Public 
opinion,  the  opinion  of  the  many,  not  the 
judgment  of  a  superior  few,  is  coming  to  rule 
the  nations,  and  it  is  through  that  opinion 


206  Honest   Business 

that  progress  is  to  be  made.  Self-interest 
will  control,  but  self-interest  may  be  enlight- 
ened and  widely  distinguished  from  narrow 
selfishness,  personal  or  national.  Selfish- 
ness is  short-sighted  and  may  bring  ruin 
instead  of  success.  Real  self-interest,  that 
which  begets  the  highest  satisfaction  and 
most  enduring  rewards  is  far-seeing  and 
regards  the  well-being  of  all  in  which  each 
must  share. 

Schools  and  churches  must  teach  the 
lessons  of  peace  and  amity  among  nations 
as  well  as  in  families  and  in  communities, 
and  dwell  upon  the  glory  and  honour  to  be 
achieved  thereby,  instead  of  stimulating 
that  kind  of  patriotic  pride  which  so  easily 
degenerates  into  chauvinism.  A  generation 
of  sound  instructiorTTrorn  press  and  pulpit,  in 
school  and  college,  would  put  avoidable  wars 
in  the  category  of  barbarism  and  national 
crime  where  they  belong.  Those  capable 
men  who  organise  and  direct  industrial  and 
commercial  enterprises,  those  who  are  en- 
gaged in  business,  as  most  men  arc  in  one  way 
or  another,  must  realise  how  destructive  and 
wasteful  war  is,  how  disturbing  and  distract- 
ing to  international  trade,  and  set  their 
faces  against  the  course  of  politics  that  leads 


TKe  Waste  of  War  207 

to  it.  By  some,  money  as  well  as  reputation 
is  made  out  of  bloody  conflicts,  but  it  is  at  the 
expense  of  others  and  to  the  detriment  of  the 
common  weal. 

Those  who  devote  capital  and  labour  to 
the  creation  of  armaments  and  munitions 
and  the  production  of  supplies  to  support 
armies  and  navies  may  thereby  get  gain  for 
themselves  and  give  employment  to  labour. 
Those  who  direct  operations  in  the  field  and 
on  the  sea,  those  who  administer  the  military 
and  naval  service,  and  those  who  do  the 
fighting  or  take  their  ease  in  the  intervals  of 
slaughter,  make  their  living  without  pro- 
ductive work.  But  this  is  all  paid  for  by 
the  labour  of  others,  its  cost  is  taken  from 
their  means  of  living,  and  that  large  and 
orderly  and  continuous  business  which  pro- 
vides for  the  wants  of  mankind  suffers  enor- 
mously. The  supplies  that  minister  to  those 
wants  are  diminished  and  their  cost  to  the 
consumers  who  do  all  the  paying  is  greatly 
enhanced.  The  general  cost  of  living  is 
raised  and  the  standard  of  living  is  depressed. 
The  inequalities  of  fortune  are  aggravated. 
Savings  from  the  fruits  of  production  for  the 
benefit  of  those  who  earn  them  and  for  the 
improvement  of  the  conditions  of  human 


208  Honest   Business 

society,  are  swept  away  and  swallowed  up  by 
a  devouring  monster  which  has  been  too  long 
worshipped  as  an  idol. 

Business  men  and  workingmen  have  every 
motive  of  self-interest  for  opposing  war,  and 
without  their  support  it  would  cease.  It 
is  in  the  power  of  financiers  to  put  a  stop  to  it, 
except  so  far  as  it  may  be  justified  by  dire 
necessity,  affecting  the  interests  of  the 
people  of  the  nations  to  which  they  belong. 
Bankers  and  financiers  perform  a  necessary 
service  of  vast  value  in  the  industrial  world 
and  are  worthy  of  their  reward.  They  handle 
on  a  great  scale  the  resources  and  credits  of 
others  in  effecting  the  multifarious  exchanges 
and  interchanges  in  the  collection  and  dis- 
tribution of  the  world's  goods,  and  upon  these 
they  take  their  toll.  They  are  called  upon 
by  governments  to  divert  some  part  of  their 
resources  and  credits  to  carrying  on  war. 
It  is  other  people's  money  that  is  loaned  for 
this  deadly  and  destructive  business,  but 
the  financiers  are  called  upon  to  obtain  it 
from  the  people  for  the  governments  and  they 
get  profit  in  so  doing.  Lenders  and  bankers 
are  assured  of  their  gain.  They  may  not 
think  of  the  loss  to  others,  but  in  the  long  run 
they  must  share  it. 


The  Waste  of  War  209 

It  is  in  the  power  of  the  financiers,  whose 
ability  to  serve  is  due  to  peace  and  whose 
service  they  owe  to  the  works  of  peace, 
to  withhold  support  from  wars  and  prepara- 
tions for  wars  that  are  not  justified  in  the 
opinion  of  an  enlightened  public ;  and  the  time 
is  at  hand  when  they  will  do  this  from  motives 
of  self-interest.  The  thousands  of  humbler 
men  who  are  lured  from  the  world's  work  by 
love  of  excitement  and  adventure,  by  hope 
of  reward  or  by  pride  of  country  and  loyalty 
to  rulers,  and  those  who  are  coerced  or  driven 
into  a  service  they  detest  and  are  led  to 
slaughter  for  a  cause  they  do  not  understand, 
will  learn  that  no  great  body  of  men  can 
be  forced  to  fight  against  their  will.  When 
the  people  become  so  far  civilised  that  they 
Hate  the  barbarities  of  war  and  are  intent  up- 
on  the  "greater  renown  of  the  victories  and 
glories  of  peace;  when  they  realise  that  by 
ley  can  achieve  greater  prosperity 
greater  power  in  the  world,  and  a  higher  and 
more  widely  and  justly  diffused  welfare 
tEemsetves  and  their  posterity,  then  will 
warfare  cease,  and  the  unruly  among  the 
nations  will  be  held  in  restraint  by  a  con- 
sciousness that  fighting  will  be  for  them  worse 
than  jutile.  The  world's  police  will  be  the 
14 


2io  Honest   Business 

only  soldiery.     The  vision  of  the  poet  will  be 
realised,  when 


'The  war  drum  throbbed  no  longer  and  the 

battle  flags  were  furled, 
In  the  parliament  of  man,  the  federation  of  the 

world." 


XVI 

COST  OF  THE  DEFECTIVE  AND  USELESS 

THOSE  fortunately  constituted  and  fairly 
developed  members  of  human  society 
who  bear  the  burden  of  the  world's  work  for 
the  production  and  diffusion  of  its  wealth, 
meaning  by  wealth  that  which  contributes  to 
the  weal  of  human  society  as  a  whole,  owe  a 
duty  to  the  unfortunate  from  whom  they 
cannot  get  free,  which  is  in  reality  a  duty  to 
themselves.  The  greatest  of  misfortunes, 
both  for  society  and  for  individuals,  is  to  be 
so  defectively  constituted  or  so  badly  devel- 
oped as  to  be  useless  or  helpless  and  doomed 
to  misery.  Such  as  these  must  be  looked  after 
and  cared  for  in  one  way  or  another  by  the 
efficient  and  capable,  not  because  the  latter 
are  responsible  for  their  condition,  not  out  of 
sympathy  or  on  their  own  account  merely, 
but  as  a  matter  of  economic  policy.  These 
defectives  are  the  cause  of  a  vast  deal  of  waste 
and  loss  and  those  who  conduct  the  activities 

211 


212  Honest   Business 

of  industry  and  business  cannot  escape  the 
effect.  It  is  as  much  for  their  interest  to  weed 
out  or  to  reclaim  this  defective  and  degener- 
ate human  material,  as  it  is  to  reclaim  and 
vivify  the  waste  places  of  the  earth  and  make 
them  blossom.  There  is  benefit  and  gain 
as  much  in  relieving  misery  and  reducing 
poverty,  in  removing  parasites  and  curing 
defects  in  human  kind,  as  in  recovering  arid 
or  swamp  lands  or  overcoming  the  pests  of 
nature. 

The  inequality  of  created  men  ranges 
downward  from  the  highest  pinnacle  of  capa- 
city for  doing  whatever  is  within  the  reach 
of  human  endeavour  to  helpless  inefficiency, 
poverty,  and  misery,  and  there  is  no  escape 
from  the  perils  of  the  defective  material  at 
the  bottom.  Not  only  are  the  poor  always 
with  us,  but  we  have  the  defective,  the 
incapable,  the  vicious,  and  the  criminal,  and 
the  remedy  for  their  defects  is  part  of  our 
problem.  Their  existence  is  one  of  the 
costliest  things  in  civilised  society,  but  the 
conventional  rules  of  that  society,  which  it 
would  not  be  safe  to  dispense  with,  forbid  us 
to  get  rid  of  them  by  extinction,  however 
merciful.  They  must  in  some  way  be  pro- 
vided for.  Whether  it  is  done  by  private 


THe  Defective  and  Useless     213 

charity  or  by  public  taxation,  it  is  almost 
always  wastefully  done  and  often  in  a  way  to 
aggravate  rather  than  mitigate  the  causes 
of  the  evil  condition.  Elimination  of  this 
source  of  loss  and  waste  is  a  business  pro- 
position, on  account  of  its  economic  results, 
and  everyone,  out  of  intelligent  self-interest 
and  for  the  benefit  of  society,  must  contrib- 
ute his  share  to  the  cure  and  prevention  of 
the  malady. 

There  are  many  causes  to  which  poverty 
may  be  attributed  and  many  maladjustments 
which  aggravate  it ;  but  what  we  have  chiefly 
to  consider  are  the  human  defects  of  which 
it  is  the  inevitable  consequence.  Whatever 
the  theories  and  arguments  of  socialists, 
treating  of  physical,  mental,  and  moral  con- 
ditions of  mankind,  we  know  that  some  are 
born  weak  and  perverted.  It  is  in  their  na- 
ture. Call  it  heredity,  prenatal  influence,  or 
what  you  will,  human  beings  come  into  the 
world  with  germs  and  tendencies  that  deter- 
mine their  destiny  in  this  world,  whatever 
may  become  of  them  hereafter.  For  this 
they  are  not  responsible  and  they  have  within 
them  small  power  to  avert  the  consequences. 
Environment  may  have  much  influence,  but 
they  do  not  choose  their  environment  at 


214  Honest    Business 

birth  and  can  do  little  to  change  it  afterwards 
until  character  is  formed   beyond    remedy. 
Others  may  change  it  and  help  them,  but 
they  have  little  capacity  for  helping  them- 
selves.    It  is  part  of  their  defect  that  they 
/  lack  the  wish  and  the  will,  as  well  as  the 
/  understanding  61  tliBil1  l)WU  UUBB  and   the 
I  strength  io  sieefTB5FT5^rcourse.     It   is 
I  all  very  well   to  taOcaDOut  everyone  being 
responsible  for  his  own  acts  and  justly  sub- 
ject to  the  penalties  of  his  own  misdoing,  but 
that  will  not  make  the  cripple  run  from  dan- 
ger or  prevent  the  blind  from  falling  into  the 
ditch.     Neither  will  it  avert  the  consequences 
to  others. 

— Many  are  mentally  and  morally  deformed, 
crippled,  and  blind  from  birth,  and  respon- 
sibility is  a  thing  they  do  not  comprehend 
or  are  unable  to  meet.  They  have  passions 
and  impulses,  without  the  will  or  the  power  to 
control,  or  weakness  and  stupor  without  the 
will  or  power  to  overcome.  Those  who  are 
normally  constituted  may  say  that  it  is  their 
own  fault  and  leave  them  to  their  fate,  but 
they  cannot  escape  a  share  in  the  conse- 
quences. The  wise  and  prudent  will  do 
what  they  can  to  mitigate  the  conditions  and 
avert  the  consequences.  What  can  they  do? 


XHe  Defective  and  Useless    215 

Something  even  for  the  mature  generation, 
much  for  the  generation  that  is  lately  born 
and  is  now  growing  up,  a  vast  deal  for  genera- 
tions yet  unborn ;  and  it  will  pay  to  do  all  that 
is  within  their  power. 

The  defective  and  wretched  members  of 
the  community  in  the  slums  of  misery  are 
mostly  useless  for  the  production  of  wealth. 
As  a  whole  they  are  a  burden.  Imbecility, 
insanity,  vice,  and  crime  are  destructive  and 
wasteful.  Guarding  against  them  and  car- 
ing for  their  victims  in  asylums,  hospitals, 
and  jails,  through  private  and  public  agencies, 
eats  up  a  vast  amount  of  the  substance  of 
those  who  do  the  work  of  the  community.  It 
makes  life  harder  for  them,  whether  they 
realise  it  or  not.  It  involves  a  large  share  of 
the  expense  and  more  of  the  difficulty  of 
government,  and  is  the  source  of  much  of  the 
corruption  in  politics.  What  can  the  healthy 
and  strong,  the  sane  and  sober,  do  for  these 
weaklings  of  society,  not  simply  for  their  sake 
or  out  of  sympathy  and  mercy,  but  for  the 
sake  of  the  health  and  soundness  of  society 
and  the  progress  and  prosperity  of  the  race? 

They  can  only  mitigate  conditions  for  the 
grown  up  generation  of  men  and  women. 
They  can  do  little  to  regenerate  and  reform, 


216  Honest   Business 

but  they  are  bound  to  do  that  little.  They 
can,  through  public  agencies  and  private 
effort,  improve  environment  so  far  as  it  is 
unfavourable  to  health,  physical,  mental,  and 
moral.  They  can  do  something  to  restrain 
influences  that  cause  degeneration  and  minis- 
ter to  weakness,  and  to  stimulate  those 
which  make  for  regeneration  and  strength. 
They  can  do  something  to  have  the  victims  of 
vice  and  crime  so  treated  as  to  encourage  and 
help  whatever  forces  may  be  in  them  tending 
to  reform.  They  can  bring  to  those  in  danger 
of  becoming  victims  the  influence  of  the  kind 
of  education  that  they  need  but  have  never 
had. 

But  it  is  with  the  young  and  growing 
generation  that  most  c,an  frf  ^rm<»  pew 
of  the  children  are  so  perverted  and  doomed 
that  they  cannot  be  saved  and  made  useful, 
and  those  who  are  so  can  only  be  segregated 
and  so  cared  for  as  to  minimise  the  harm  they 
may  do.  Generation  is  a  continuous  process. 
There  is  no  beginning  or  end  to  what  we  call 
a  generation,  any  more  than  there  is  begin- 
ning and  end  to  the  current  of  a  running 
stream.  The  saving  of  children  cannot 
begin  too  soon  in  their  lives,  and  it  is  the 
mothers  of  the  poor  and  the  unfortunately 


THe  Defective  and  Useless    217 

situated  who  need  the  "first  aid"  which  is 
to  minister  to  their  offspring.  There  is  noth- 
ing more  efficacious  than  training  mothers 
to  the  duties  of  motherhood,  so  far  as  it 
can  be  done,  and  with  young  mothers  it 
can  be  done  with  much  effect.  It  is  a  trying 
and  often  a  discouraging  task,  but  it  is  bene- 
ficent. Babyhood  is  a  period  in  which  the 
making  of  character  gets  its  start,  when  the 
twig  is  first  bent  or  set  straight. 

The  earliest  stage  of  education  is  the 
most  important.  The  kindergarten,  under 
competent  teachers  and  with  well-directed 
methods,  is  a  most  beneficent  institution, 
which  should  be  spread  over  the  land  and 
liberally  supported  by  both  public  and  pri- 
vate means  until  every  child  can  be  started 
right.  Thereby  the  generations  may  be 
regenerated  as  they  go  along  till  poorhouses, 
asylums,  and  prisons  disappear,  and  the  la- 
bour force  of  the  country  is  recruited  with 
better  blood  and  made  more  effective.  But  the 
process  of  character-making  as  well  as  mind- 
training  must  be  carried  through  all  grades  of 
schools  from  the  lowest  to  the  highest.^. True 
education  is  not  learnjny.  but  training  and 
discipline  for  the  work  and  the  duties  of  life. 
It  is  not  those  who  know  most  but  those 


218  Honest  Business 

who  do  best  that  are  of  greatest  value  in  the 
world.  Genius  and  talent  are  able  to  take 
care  of  themselves  where  opportunity  is 
offered.  It  is  for  the  mass  that  we  speak, 
with  a  view  to  mitigating  poverty  and 
wretchedness  and  keeping  up  a  warfare  to 
banish  them  from  the  world. 

But  really  we  need  to  go  back  of  those 
who  are  born  to-day  and  get  human  beings 
better  born  as  well  as  better  bred.  Human 
society,  with  its  conventionalities,  its  banali- 
ties, and  its  euphemisms,  speaks  of  breeding, 
good  or  bad,  as  a  matter  of  surroundings  and 
training  after  birth.  In  the  breeding  of  other 
animals  than  man  we  know  that  its  quality 
depends  greatly  upon  the  begetting  and  the 
conception,  upon  life  before  birth.  It  is  as 
truly  so  of  men,  except  that  with  their 
plastic  brain  and  nervous  system,  with  the 
higher  intellectual  capacity  and  the  moral 
sense  that  belong  to  humanity,  and  with 
spiritual  instincts  and  aspirations,  more  can 
be  done  after  birth  to  correct  the  defects  of 
begetting  than  in  the  lower  animals.  There 
are  souls  as  well  as  bodies  to  be  considered  in 
the  breeding  of  men,  and  souls  are  susceptible 
of  a  different  training  from  that  of  the 
physical  powers. 


THe  Defective  and  Useless     219 

The  work  of  long  heredity  is  hard  to  undo. 
The  current  comes  through  hidden  channels 
out  of  the  irretrievable  past  and  through  some 
mysterious  pressure  is  liable  to  show  itself 
for  good  or  evil  in  the  character  of  a  new 
generation  or  some  members  of  it  whose 
ancestry  is  lost  in  oblivion.  A  deep  stain 
may  suddenly  appear  which  had  its  origin  in  a 
sin  or  an  accident  of  long  ago.  We  can  go 
no  farther  back  than  parentage,  but  if  the 
parentage  is  sound  in  motive  and  in  purpose 
it  will  extinguish  any  ancestral  taint  that 
lurks  in  the  blood.  But  how  often  is  there 
motive  and  purpose  of  any  kind  in  parent- 
age? It  is  the  most  important  thing  in 
human  experience,  and  for  the  most  part  it  is 
the  most  heedless  and  haphazard. 

So  far  as  the  propagating  of  vice  and  crime 
is  concerned,  or  that  of  imbecility  and  insan- 
ity, or  even  of  serious  physical  defects  which 
are  liable  to  be  transmitted,  much  can  be 
done  by  way  of  prevention,  though  the 
transmission  is  far  from  being  a  matter  of  cer- 
tainty. There  might  possibly  be  some  regu- 
lation to  prevent  the  marriage  of  those  unfit 
for  the  responsibility  of  having  offspring,  but 
that  would  probably  be  ineffective  and  it 
might  make  matters  worse  on  account  of  the 


22O  Honest   Business 

ease  of  illicit  mating.  But  the  power  to  beget 
or  to  bear  offspring  can  be  effectually  steril- 
ised under  competent  and  judicious  super- 
vision. 

The  begetting  of  poverty  and  misery  can- 
not be  prevented  by  any  such  expedient. 
Neither  can  that  of  folly  and  vice  or  the  many 
sins  and  defects  which  appear  in  children 
without  having  their  origin  in  faults  of  par- 
ents so  marked  as  to  justify  interference  with 
the  course  of  nature.  As  in  the  case  of  most 
of  the  evils  that  beset  human  life,  this  is  a 
matter  that  must  depend  for  improvement 
upon  better  training  and  education.  How 
often  is  marriage  in  any  rank  in  life  ~33ef! 
mined  by  wise  consideration  of  fitness  or  an 
intelligent  regard  for  parenthood?  It  is 
commonly  the  result  of  blind  passion  or  an 
attraction  that  proceeds  from  physical  desire 
or  else  of  a  calculation  which  ignores  the 
rights  of  posterity.  It  is  almost  a  matter  of 
chance  if  it  turns  out  happily  or  in  any  sense 
favourably,  and  often  its  mistakes  are  visited 
upon  children  to  the  third  and  fourth  genera- 
tion, or  sent  down  the  stream  of  heredity  to 
unknown  lengths.  There  can  be  no  author- 
ity of  state  or  church  effectually  to  control  the 
nature  of  men  and  women,  but  there  can  be 


THe  Defective  and  Useless    221 

more  heed  given  in  education  by  both  state 
and  church  to  inculcating  sound  ideas  on  the 
subject  and  to  counteracting  the  pestilent 
effect  of  treating  it  as  a  matter  of  mere 
romance  founded  upon  passion  and  heat  of 
blood. 

It  is  well  for  men  and  women  of  fairly 
mature  years  to  come  together  in  congenial 
companionship,  attracted  by  qualities  that 
make  them  fit  to  dwell  together  in  mutual 
love  and  happiness,  to  the  best  of  their  belief, 
even  though  parenthood  be  not  seriously  con- 
sidered. The  male  and  female  are  com- 
plementary in  other  senses  than  the  physical, 
and  there  are  benefits,  comforts,  and  advan- 
tages in  wedded  life  even  if  it  be  childless,  or 
considered  apart  from  the  begetting  of  child- 
ren. Still,  that  is  a  consideration  of  first 
importance  when  marriage  is  consummated. 
The  having  of  children  may  be  avoided  in  a 
legitimate  way  without  blame  if  there  is 
serious  reason  for  it.  It  is  not  to  be  assumed 
that  the  mating  of  men  and  women  has  for  its 
sole  purpose  or  justification  the  raising  of 
families.  The  encouragement  of  large  fami-  / 
lies  regardless  of  circumstances  and  condi-  I 
tions,  especially  among  the  poor,  is  a  sad  I 
mistake,  and  the  cause  of  much  wretchedness.  I 


222  Honest  Business 

The  economic  argument  in  support  of  it 
favours  the  begetting  of  races  of  children  to 
become  overworked  and  ill-nourished  toilers 
for  others,  or  to  be  made  food  for  powder  in 
the  wars  which  others  foment. 

Being  married  and  living  together,  whether 
it  be  in  happy  concord  or  jarring  discord,  men 
and  women  do  and  will  have  children.  Un- 
less there  is  some  legitimate  impediment,  it 
is  their  duty  to  themselves  and  to  society. 
"The  world  must  be  peopled. "  Then  comes 
the  crucial  point  of  all  in  human  generation. 
We  hear  much  of  a  new  science  or  quasi - 
science  in  these  days  called  "Eugenics."  It 
gives  promise  of  raising  the  minds  of  men  and 
women  out  of  the  slough  of  ignorance  and 
false  sentiment,  and  out  of  deplorable  filth 
in  the  sexual  relation.  Men  and  women  past 
the  age  of  puberty  are  drawn  together  by  a 
powerful  impulse,  akin  to  what  is  called 
instinct  in  other  animals,  but  an  impulse 
which  should  be  dominated  by  reason  and 
moral  sense  in  mankind.  I  Its  beneficent 
purpose  is  not  merely  the  propagation  of  the 
species,  the  breeding  of  children  to  become 
men  and  women  and  to  take  the  place  of  their 
parents  and  add  to  the  ranks  of  workers.  It 
is  to  establish  a  blessed  personal  and  family 


THe  Defective  and  Useless    223 

relation  which  has  a  potent  influence  for  the 
progress  and  elevation  of  the  race. 

With  regard  to  the  function  of  their  physi- 
cal nature  which  concerns  the  sex  relation  and 
its  proper  purpose,  the  young  are  commonly 
allowed  to  grow  up  in  ignorance  or  left  to 
pick  up  their  knowledge  among  themselves 
or  from  those  whose  ideas  are  gross  or  per- 
verted. From  a  false  sense  of  delicacy, 
parents  and  teachers  alike  treat  it  as  a  matter 
of  secrecy,  not  to  be  spoken  of,  which  by  no 
means  prevents  it  from  being  thought  of  or 
talked  about  under  that  ban  of  secrecy.  The 
result  is  to  make  of  the  exercise  of  the  func- 
tion in  an  illicit  way  one  of  the  most  degrad- 
ing forms  of  vice,  upon  which  we  need  not 
dwell,  but  which  is  the  source  of  more  wrong 
and  misery  than  any  other  that  defaces 
modern  civilisation.  There  is  nothing  sad- 
der in  human  life  than  the  constant  sacrifice 
to  the  Moloch  of  sensuality  of  young  life  and 
character  by  the  prostitution  of  a  function 
that  has  a  sacred  purpose.  This  is  largely 

••^^^^  •^•••IB  ~       ""^ — ^^^^^^""E^**1^*^^ 

$tte.  to  ignorance,  deceit,  and  concealment, 
though  the  iniquity  is  sometimes  brazenly 
flaunted  in  the  face  of  society  or  excused  as 
the  inevitable  indulgence  of  natural  impulses. 
While  human  nature  is  so  imperfectly  de- 


224  Honest  Business 

veloped  and  is  subject  to  so  much  weakness  it 
cannot  be  wholly  prevented,  but  it  can  be 
treated  with  truth,  candour,  and  common 
sense,  and  its  consequences  greatly  mitigated. 
It  is  at  least  possible  so  to  guide  the 
instruction  of  the  young,  under  the  influence 
of  parental  teaching  and  the  education  of 
school  and  church,  and  under  medical  and 
religious  advice,  that  when  men  and  women 
-  are  joined  in  matrimony,  they  will  have  a  rea- 
sonable appreciation  of  the  nature  and  respon- 
sibility of  their  relation  as  possible  parents 
of  children  whose  tendencies  and  character- 
istics will  be  mainly  determined  by  the  first 
act  that  gives  them  life  and  the  period  of 
gestation  that  is  to  bring  them  to  the  light  of 
the  outer  world  in  which  they  are  to  develop 
and  grow  to  maturity.  Upon  that  first  act 
may  depend  the  fate  of  the  offspring  of  father 
and  mother,  and  yet  with  what  utter  lack 
of  thought  and  with  what  reckless  emotion  of 
sheer  sense  is  the  responsibility  incurred  in 
most  cases,  and  how  little  heed  is  given  in  the 
most  tender  period  of  life  to  correcting 
tendencies  that  may  have  been  started  wrong 
\  when  the  germ  was  planted  in  the  womb  from 
I  the  momentary  impulse  of  two  souls  to  the 
begetting  of  a  new  life! 


TKe  Defective  and  Useless    225 

The  degradation  of  the  sexual  passion 
through  ignorance  and  lack  of  a  sound  moral 
sense  is  the  direct  cause  of  much  of  the 
misery,  the  poverty,  and  the  disease  that 
afflict  human  society.  The  heedless  indul- 
gence of  it  is  the  cause  of  many  of  the  defects 
and  evil  tendencies  which  impair  the  effici- 
ency of  the  members  of  that  society  in  the 
work  of  providing  for  its  sustenance,  and  so 
mar  their  efforts  to  make  its  life  more  com- 
fortable and  happy.  It  is  this  that  creates 
disorders,  breeds  trouble  and  warfare,  makes 
government  difficult  and  costly,  and  human 
progress  so  painfully  slow.  The  creation  of 
man  was  not  the  sudden  result  of  a  divine 
fiat.  It  is  a  process  of  evolution  which  is 
still  far  from  complete.  The  human  race  is 
still  in  the  making.  Generation  is  proceed- 
ing from  day  to  day  and  from  night  to 
night  without  cessation  the  world  over  out 
of  all  sorts  of  material  and  under  all  manner 
of  conditions,  from  the  brutal  to  the  angelic. 

The  stream  of  humanity  with  its  leaven  of 
divinity  flows  from  the  loins  of  paternity  and 
the  nourishing  womb  of  maternity  through  the 
ferment  and  turmoil  of  the  mill  of  life  to 
the  grave.  It  is  vastly  varied,  with  deep  and 
shallow  places,  currents  swift  and  currents 
is 


226  Honest   Business 

sluggish,  eddies  of  turbulence  and  pools  of 
serenity,  with  waters  pure  and  waters  foul 
moving  from  darkness  to  darkness  under  the 
light  of  sun  and  stars.  Whence  it  comes  we 
dimly  know.  Whither  it  goes  we  cannot  see. 
We  only  dream  and  hope  and  believe  it  does 
not  flow  for  naught,  coming  out  of  a  lifeless 
void  and  falling  into  a  sea  of  extinction. 
Else  why  this  causeless  and  resultless  pheno- 
menon upon  the  face  of  a  whirling  planet? 

At  all  events,  we  are  moved  by  something 
within  us  or  something  above  us  to  strive 
continually  to  better  this  life,  to  improve  the 
human  race  and  get  finer  results  from  the 
brief  span  of  activity  that  seems  to  be  pre- 
paring it  for  some  higher  destiny.  Whether 
this  be  so  or  not,  it  is  worth  while  to  make  the 
best  of  it  while  it  is  passing,  and  do  what  we 
may  to  improve  it  for  those  who  come  after 
us.  Where  most  can  be  done  is  at  the  springs 
which  constantly  feed  the  stream.  Or,  to 
get  clear  of  our  poetical  imagery,  it  is  the 
part  of  wisdom  and  of  philanthropy,  in  seek- 
ing to  raise,  purify,  and  strengthen  humanity 
in  the  struggle  of  life,  to  begin  the  work  of 
arresting  degeneration  and  inducing  regener- 
ation at  the  point  where  generation  goes  on. 
One  of  the  highest  objects  of  striving  for 


THe  Defective  and  Useless    227 

fMHhftta 

wealth  is  to  obtain  the  means  and  the  power       / 
to  improve  and  elevate  the  human  race.     It 
should  be  a  part  of  the  business  of  life  and  a 
motive  for  success  in  its  work.     No  man  can 
live  and  do  business  unto  himself  alone,  and 
so  far  as  he  fails  to  conduct  it  for  the  common      / 
good  he  brings  the  penalty  upon  himself. j 

"To  thine  own  self  be  true 
And  it  shall  follow  as  the  night  the  day 
Thou  canst  not  then  be  false  to  any  man." 

It  may  be  drawn  as  a  corollary  that  no 
man  can  be  true  to  himself  unless  he  is  true 
in  his  conduct  toward  his  fellow-men. 


XVII 

HONOURABLE    MAKING    AND    USE   OF 
WEALTH 

IT  would  be  commonplace  to  discourse  at 
length  upon  the  duties  and  obligations  of 
the  possessors  of  wealth  after  it  has  been 
accumulated  or  inherited  and  they  have 
retired  to  a  life  of  leisure.  Much  less  thought 
of,  but  more  important,  are  the  duties  and 
obligations  of  the  makers  of  wealth  while  it  is 
in  the  making  and  they  are  busy  men,  intent 
upon  their  fortunes.  It  is  an  easy  matter  for 
the  retired  rich  man,  with  an  assured  income 
from  secure  investments,  vastly  in  excess  of 
his  wants,  though  these  may  include  all  the 
luxuries  and  embellishments  of  a  rational  life, 
to  be  liberal  in  endowing  institutions  for 
education  and  research,  in  founding  libraries 
or  providing  them  with  buildings  as  so  many 
monuments  to  his  own  glory,  in  helping  to 
support  hospitals  and  worthy  charities,  and  in 
contributing  to  schools,  museums,  churches, 
228 


MaKing'  and  Use  of  WealtH     229 

and  philanthropic  causes.  In  themselves 
these  things  are  commendable,  but  credit  is 
won  by  them  out  of  proportion  to  the  merit 
acquired  by  thus  disposing  of  superfluity. 
It  is  likewise  creditable  if  the  wealthy  man  is 
public-spirited  and  gives  aid  to  civic  advance- 
ment and  political  and  social  progress. 

Many  do  not  even  seek  the  gratitude  or 
favour  of  their  fellow-men  or  even  find  satis- 
faction for  themselves  in  these  things,  but 
they  are  the  commonplaces  of  a  worthy  use  of 
wealth  after  it  has  been  accumulated  and 
made  secure.  Sometimes  they  are  done 
from  the  worthiest  motives  and  in  a  judicious 
and  unostentatious  way.  Sometimes  they 
are  done  to  gratify  vanity,  win  applause, 
sanctify  the  memory  of  a  name,  or  serve  as  a 
monument  to  a  "generous  giver."  Some- 
times they  are  intended  to  disarm  hostile 
feeling,  mend  a  damaged  reputation,  gild 
a  career  at  its  close  which  has  been  covered 
with  stains  and  blemishes  in  its  progress, 
and  to  leave  a  heritage  of  honour  which  has 
not  been  earned  in  a  lifetime.  But  oblivion 
should  not  be  purchased  or  memory  bribed  to 
silence  by  such  devices.  Eternal  justice 
cannot  be  disarmed  in  the  history  of  men  or 
nations. 


-  :,"  Honest   Business 

More  important  than  the  manner  of  dis- 
posing of  superfluous  wealth  is  the  manner  of 
acquiring  it.  This  has  a  wider  and  more  last- 
ing influence  upon  the  welfare  of  society  and 
of  the  human  beings  who  make  up  society. 
More  essential  to  the  good  repute  as  well  as 
to  the  character  of  the  rich  man,  is  the  observ- 
ance of  the  duties  and  obligations  of  wealth 
while  it  is  accumulating  than  after  it  has  been 
gathered  in,  though  the  ultimate  sum  in  his 
keeping  may  be  made  smaller.  He  may  be 
doing  good  throughout  his  career  instead  of 
waiting  till  the  end  and  then  trying  to  redeem 
the  evil  he  has  done  or  make  amends  for  the 
neglect  of  opportunities  for  right-doing.  His 
name  may  not  be  on  as  many  tablets  or  as 
imposing  a  monument,  or  appear  as  many 
times  in  print,  but  it  will  be  cherished  in  more 
and  warmer  hearts  and  written  larger  in  the 
everlasting  register. 

The  man  who  is  gifted  as  a  maker  of  wealth 
may  be  in  his  way  a  genius,  and  must  be  a 
person  of  large  ability  for  the  work  he  has  to 
do.  Getting  rich  is  not  a  fine  art  and  does 
not  call  for  the  exercise  of  the  most  exalted 
faculties,  but  it  is  vastly  useful.  It  may,  and 
usually  does,  benefit  the  community  more 
than  those  who  thereby  achieve  their  individ- 


MaKing  and  Use  of  WealtK     231 

ual  purpose.  In  these  modern  days  men  do 
not  get  very  rich  in  mean  and  petty  ways,  or 
by  large  methods  of  plunder  and  oppression, 
like  the  robber  barons  or  the  buccaneers  of 
trade  on  land  or  sea  in  former  days.  They 
must  be  men  of  brains,  endowed  and  trained 
for  the  tasks  by  which  wealth  is  created,  dis- 
tributed, and  accumulated.  For  many  years 
they  must  live  laborious  days  and  pass 
nights  of  vigilance.  Herein  is  found  that 
same  inequality  among  men  of  which  we  have 
frequent  occasion  to  speak.  The  men  who 
are  ambitious  to  get  very  rich  are  not  many, 
and  those  who  are  capable  of  it  are  still  fewer. 
Most  of  those  who  try  fail;  and  though  their 
efforts  may  have  benefited  others,  they  would 
have  been  "better  off"  with  less  or  a  different 
ambition.  Getting  rich  is  partly  a  matter  of 
circumstances,  conditions,  and  opportunities, 
but  luck  has  little  to  do  with  it.  Some  are 
quick  to  see  chances,  seize  upon  them  and 
cling  to  them,  while  others  are  blind  to  them, 
or  indifferent  or  listless  in  their  presence,  or 
afraid  to  grasp  and  wrestle  with  them.  The 
great  essentials  are  the  desire,  the  determina- 
tion, and  the  capacity  for  the  work  by  which 
wealth  is  gained  in  the  various  lines  of 
creative  economy. 


232  Honest   Business 

We  have  said  that  the  art  is  vastly  useful, 
but  often  too  much  is  claimed  for  it  on  that 
score.  For  the  most  part  those  engaged 
in  it  care  only  for  its  use  to  themselves, 
though  ready  to  claim  credit,  especially  as  an 
excuse  for  their  own  shortcomings,  for  giving 
others  a  chance  to  work  and  live,  and  for  help- 
ing by  their  well  directed  energy  to  make  the 
wealth  in  which  whole  communities  and  even 
nations  share.  It  is  true  that  by  their  ability 
to  obtain  capital,  to  organise  industries  and 
trade  on  a  large  scale,  and  to  direct  great 
operations  of  production  and  the  interchange 
of  products,  they  afford  employment  to 
thousands  of  others  of  humbler  and  varying 
capacities,  which  they  would  not  otherwise 
have  and  could  not  provide  for  themselves. 

By  employing  the  best  agencies  and  devices 
for  making  labour  effective,  they  increase  pro- 
duction and  reduce  its  cost.  They  enlarge 
the  quantity  produced,  transported,  and 
exchanged  by  any  given  number  of  hands 
and  heads,  and  improve  the  quality  of  the 
output  of  the  labour  of  brain  and  brawn. 
They  augment  the  volume  and  enhance  the 
value  of  what  is  to  be  shared  as  the  re- 
ward of  the  united  effort,  of  what  is  to  go  to 
the  wages  of  labour,  the  salaries  and  fees  of 


MaKing'  and  Use  of  WealtH     233 

intellectual  service,  and  the  profit  of  those 
who  supply  capital  and  direct  operations. 
They  increase  abundance  and  lower  prices 
for  those  to  whom  the  results  are  distributed. 
They  confer  a  general  benefit  whether  their 
desire  is  to  do  so  or  not.  So  much  must  be 
granted,  for  experience  and  observation 
prove  it;  but  it  does  not  follow  that  they  do 
all  that  in  duty  and  just  obligation  they  are 
bound  to  do,  or  act  from  motives  correspond- 
ing to  their  responsibility.  Besides,  they 
could  no  more  accomplish  the  results  without 
the  co-operation  of  many  heads  and  hands  of 
less  capacity  than  their  own  than  these  could 
accomplish  them  without  the  superior  ability 
of  the  controlling  men. 

The  agency  through  which  such  men  chiefly 
work  nowadays  is  the  organised  corporation. 
The  patriarchal  employer  who  chooses  his 
own  men  and  comes  into  close  personal 
relation  with  them  belongs  to  a  past  genera- 
tion. The  corporation  may  be  a  soulless 
organism,  but  it  would  be  lifeless  unless  it 
were  informed  by  the  souls  of  men.  As  a 
working  contrivance  it  has  many  souls,  and 
these  do  not  lose  their  responsibility  or  their 
destiny  because  they  give  motive  power  to  a 
great  machine  for  putting  economic  forces  at 


234  Honest   Business 

work  with  many  labourers  and  much  appara- 
tus for  production  or  for  the  distribution  and 
interchange  of  products.  Men  who  direct 
corporate  power  are  as  much  bound  to  be 
honest  and  just  with  themselves  and  to 
others,  to  be  faithful  to  duty  and  to  their 
obligations  to  fellow-men  and  to  human  so- 
ciety, as  if  they  stood  alone  to  fight  the  battles 
of  life.  It  may  be  easier  for  them  to  turn  a 
deaf  ear  to  "the  stern  daughter  of  the  voice 
of  God"  in  that  relation,  but  it  should  be  no 
easier  for  them  to  escape  her  judgment  or  the 
penalty  of  violating  her  decrees.  A  cdr^ 
poration  has  "No  body  to  kick  and  no  soul 
to  damn"  and  it  cannot  suffer  pains  and 
penalties,  but  those  who  constitute  it  and 
who  direct  and  manage  it  can  be  reached  by 
the  hand  of  the  law  and  the  judgment  of  men. 
They  should  be  made  to  enjoy  and  to  suffer 
according  to  their  deeds  like  those  who  have 
no  such  shelter. 

What  then  are  the  duties  and  obligations 
of  men  engaged  in  making  and  accumulating 
wealth  by  directing  the  efforts  of  others, 
whether  individually,  in  partnership,  or  with 
all  the  power  of  great  organisations  of  capital? 
They  owe  duties  to  the  men  they  employ, 
who  enable  them  to  accomplish  their  objects. 


MaKing  and  Use  of  WealtH     235 

The  labourer  is  worthy  of  his  hire.  The 
workman  is  entitled  to  a  fair  share  of  that 
which  he  helps  to  produce,  proportioned  to 
his  contribution  to  the  result.  This  by  no 
means  signifies  an  equal  share  for  all,  for  all 
do  not  contribute  equally.  "Labour  and 
service"  is  of  many  grades  and  kinds  of  un- 
equal value.  The  owner  and  employer,  the 
director  and  manager,  have  the  advantage  of 
possession  and  power  in  collecting  and  dis- 
tributing the  proceeds  from  the  co-operation 
of  forces,  and  the  general  economic  principle 
has  been  to  allow  to  the  employed  only 
what  is  necessary  to  obtain  their  work  and 
make  it  effective,  and  to  permit  the  employer 
to  keep  the  rest.  The  workmen  being  many 
must  compete  for  the  chance  to  live  and  must 
take  what  they  can  get.  The  employer,  being 
one,  with  the  treasury  in  his  keeping,  may  hold 
on  to  all  that  he  does  not  have  to  pay  out  to 
secure  the  service  he  needs;  or,  if  he  has  to 
compete  with  others  to  secure  labour,  it  is  with 
those  who  act  upon  the  same  motives  and  on 
the  same  principle  of  selfishness,  with  the  ad- 
vantage on  their  side.  Together  they  establish 
the  practice  of  getting  all  they  can  and  letting 
go"  only  what  they  must.  They  make  the 
'  'standard  of  wages' '  or  claim  the  right  to  do  so. 


i 


236  Honest   Business 

This  is  the  old  economics,  devoid  of  soul 
and  barren  of  ethics.  It  is  as  barbaric  for 
"ife  day  as  the  economics  that  built  the 
pyramids  and  the  towers  of  Babylon,  made 
the  wealth  of  the  Roman  Empire,  and  wrought 
the  mediaeval  castles  and  cathedrals.  Pay- 
ment by  wages  and  salaries,  under  more  or 
less  competitive  conditions,  may  be  a  neces- 
sity, but  it  can  be  modified  and  supplemented 
according  to  the  demands  of  equity,  and  with 
due  regard  to  circumstances  in  every  employ- 
ment. It  is  always  possible  for  men  to  do 
justice,  if  they  will.  The  plea  that  one 
employer  cannot  do  better  by  his  men  than 
others  are  wont  or  willing  to  do.  js  Dlaiisihlp 
but  fallacious.  He  can  set  the  pace  in  a  ne\v 
competition  for  the  ^ood  will,  the  efficiency, 
and  the  fidelity  of  the  workmen,  which  will 
make  them  worth  more  to  him  as  well  as  to 
themselves.  He  can  set  his  wages  as  high 
as  equity  demands  and  make  the  conditions  as 
good,  and  get  a  service  that  will  make  it 
worth  while,  thereby  showing  the  competitor 
what  he  must  do.  If,  perchance,  the  net 
earnings  for  capital  turn  out  to  be  somewhat 
less  at  times,  they  will  be  more  blessed  to  the 
possessors,  but  probably  they  will  soon  come 
to  be  greater.  At  all  events,  the  policy  is 


MaKing  and  Use  of  Wealth     237 

right  and  should  be  insisted  upon  for  that 
reason.     It  may  seem  ideal,  but  striving  to 
make   the   ideal   real   is   the   mainspring   of  • 
progress,    and    this    is    already    practicable.  I 

But  the  payment  of  just  wages  is  not  every- 
thing in  the  employment  of  labour  for  making 
wealth.  Fair  and  considerate  treatment  of 
the  employed  is  much.  Making  every  pro- 
vision for  safety,  health,  and  comfort  and 
affording  means  of  recreation  and  improve- 
ment in  the  lives  of  workmen  and  their  fami- 
lies count  heavily  in  the  account.  It  costs, 
but  if  properly  directed  and  managed  it  will 
pay.  Workmen  will  be  made  more  compe- 
tent, more  efficient,  more  trustworthy  and 
faithful,  and  the  result  will  be  the  production 
of  more  wealth  to  be  distributed  or  accumu- 
lated. 

Personal  contact  with  men  is  necessary  to 
establish  and  maintain  proper  relations.  A 
wise,  considerate,  and  liberal  employer,  who 
conducted  business  on  a  scale  admitting  of  his 
own  personal  oversight,  could  treat  all  who 
worked  for  him  with  humane  consideration 
and  attach  them  to  his  service  from  motives 
of  gratitude.  With  great  industrial,  trans- 
portation, and  trading  corporations  this  can 
no  longer  be  done  by  one  responsible  and 


238  Honest  Business 

considerate  man  at  the  head,  with  no  interest 
but  his  own  at  stake;  but  the  same  principle 
can  be  applied  by  a  proper  organisation  and 
'with  the  right  spirit  in  boards  of  direction. 
It  only  needs  to  have  the  principle  accepted 
as  sound,  both  economically  and  ethically, 
by  the  body  of  stockholders,  and  to  have 
directors  and  officers  chosen  who  understand 
its  purpose,  are  in  sympathy  with  it,  and  are 
capable  and  willing  to  see  that  it  is  applied. 
Though  workmen  are  employed  by  thousands 
in  the  various  branches  of  a  great  establish- 
ment or  a  great  system,  they  can  be  made  to 
feel  that  they  are  treated  fairly  and  consi- 
derately, that  the  employer,  even  though  it  be 
a  great  corporate  organism,  is  not  without 
soul  in  its  conduct  and  that  their  interests  are 
regarded  as  an  essential  part  of  the  interests 
of  the  whole. 

Here  that  persistent  question  of  the  equality 
or  inequality  of  men  again  obtrudes.  Em- 
ployers on  a  large  scale  are  apt  to  consider 
"workingmen"  as  a  "class"  of  wage-earners, 
dependent  upon  wages  for  their  daily  bread 
and  occupying  a  different  human  level  from 
that  of  owners,  directors,  managers,  superin- 
tendents, and  their  various  salaried  subordi- 
nates. There  is  no  distinct  dividing  line,  so  far 


MaKing'  and  Use  of  "WealtH     239 

as  human  faculties  and  qualities  are  concerned. 
Many  a  man  in  the  ranks  is  capable  of  rising 
to  places  of  responsibility  and  command  if 
the  opportunity  is  open.  Many  are  worthy 
of  a  place  at  the  council  table.  All  are 
entitled  to  be  treated  as  men  with  common 
human  motives  and  susceptibilities.  There 
is  no  reason  why  those  who  are  working  in 
the  ranks  as  wage  earners  should  not  share 
the  confidence  of  those  who  direct  their 
labours,  have  matters  that  concern  them 
explained,  and  be  consulted  in  regard  to  things 
which  affect  their  comfort  and  welfare. 

This  suggests  one  of  the  highest  obligations 
of  the  employer  who  is  making  wealth  out  of 
the  labour  of  some  men  by  means  of  the 
capital  of  other  men.  That  is  the  obligation 
to  look  after  the  welfare  of  the  employed,  not 
as  dependents  or  inferiors  to  be  cared  for,  but 
as  sharers  in  the  industry  or  the  business  in 
which  they  are  employed,  getting  from  it 
that  part  of  the  wealth  created  which  fairly 
belongs  to  them,  to  spend  or  to  save.  It 
should  be  part  of  the  business  to  make 
conditions  as  favourable  as  possible  to  the 
health,  the  safety,  and  the  well-being  of  those 
employed.  Regard  should  be  had  to  their 
domestic  welfare,  to  their  means  of  education, 


240  Honest   Business 

diversion,  and  recreation,  to  diffusing  the  ben- 
eficence that  proceeds  from  wealth  in  the  mak- 
ing among  those  who  are  engaged  in  making  it, 
according  to  their  just  claims,  and  not  aggre- 
gating it  to  the  utmost  in  the  hands  of  those 
who  do  the  directing  or  control  the  direction. 
This  does  not  imply  that  the  employer 
as  a  superior  and  benevolent  being,  is  to 
exercise  a  fatherly  care  over  the  workmen  and 
contribute  of  his  substance  for  their  benefit 
in  addition  to  paying  them  the  wages  which 
they  earn.  These  conditions  of  welfare  and 
benefit  are  part  of  what  the  workmen  earn 
and  are  fairly  entitled  to  receive  from  the 
proceeds  of  their  labour.  Whatever  form 
they  may  take,  the  workmen  should  see  how 
they  contribute  to  them  and  should  have  their 
part  in  establishing  and  directing  them.  An 
industrial  community  can  and  should  involve 
a  "community  of  interest"  between  employ- 
ers and  employed  for  their  mutual  benefit 
in  the  creation  and  conservation  of  wealth. 
Thereby  wealth  will  be,  not  lessened  but 
enhanced.  It  will  be  equitably  but  not 
equally  diffused,  for  so  long  as  men  are  un- 
equal in  capacity  and  in  the  part  they  play 
in  creating  wealth,  there  will  be  and  ought  to 
be  inequality  in  its  possession. 


MaKing  and  Use  of  Wealth     241 

But  while  men  are  entitled  to  the  possession 
of  wealth  in  proportion  to  their  part  in  creat- 
ing, conserving,  and  accumulating  it  by  the 
processes  of  production,  it  must  be  derived 
from  resources  which  are  the  common  heri- 
tage, opportunities  afforded  by  the  organisa- 
tion of  society  and  government,  and  the  joint 
labour  of  many  without  which  the  individual 
would  be  helpless.  The  man  who  succeeds 
by  using  these  resources  and  opportunities 
and  this  labour  in  amassing  wealth  has  a 
peculiar  responsibility  to  the  community, 
the  society,  the  nation,  which  have  furnished 
them,  and  corresponding  duties  and  obliga- 
tions as  a  citizen.  If  such  men  are_  faithful, 
to  these  duties  and  obligations  they  have 
their  reward.  If  they  squander  the  sub- 
stance which  they  have  gathered  in  self- 
indulgence,  they  also  have  their  reward.  In 
the  final  reckoning  there  will  be  retributive 
justice. 


XVIII 

HONOURABLE  CONDUCT  OF  LABOUR 

'"THERE  is  no  natural  or  legitimate  antag- 
1  onism  between  capital  and  labour  any 
more  than  between  the  workmen  and  the 
tools  he  handles  or  the  machine  he  operates. 
What  is  capital  but  a  tool  of  labour,  the  shop 
or  mill  in  which  the  workman  works,  the 
material  he  uses,  the  machine  he  runs,  and 
the  means  of  getting  materials  together  and 
distributing  the  products?  Labour  and  capi- 
tal must  be  used  together  to  produce  results, 
and  the  more  effectively  and  harmoniously 
they  co-operate  the  greater  the  result.  But 
there  is  no  life  or  feeling  in  labour  or  capital 
as  abstraction  or  as  substance.  It  is  men 
that  have  sympathies  and  antipathies,  an- 
tagonism or  co-operation,  motives  and  pur- 
poses, not  capital  and  labour.  It  is  the  men 
who  own  capital  in  buildings,  supplies  of 
material  and  machinery,  or  the  means  of 

obtaining  them,  and  the  men  who  do  the 
•4J 


Conduct  of  Labour  243 

work  for  which  these  are  provided  that 
co-operate  in  producing  results.  Work  is  not 
confined  to  the  unskilled  labour  of  driving 
teams  and  handling  materials  or  finished 
goods,  and  the  labour  skilled  in  the  use  of 
tools  or  machines.  It  includes  the  labour  of 
managing  and  directing  and  of  conducting 
the  business,  the  labour  that  finds  markets  in 
which  to  buy  or  hire  and  markets  in  which 
to  sell,  and  does  the  work  of  collecting  and 
distributing,  paying  and  receiving. 

All  the  labourers,  with  hands  or  with  heads, 
are  alike  necessary  to  the  industry  and  the 
trade,  and  all  are  worthy  of  their  hire  and  en- 
titled to  a  share  of  the  proceeds  in  proportion 
to  their  part  in  producing  them.  The  more 
effectively  they  work  together  the  greater  the 
proceeds  to  be  distributed  and  the  rewards 
to  be  apportioned.  Why  should  there  be 
antagonism,  which  will  of  necessity  impair 
efficiency  and  diminish  results?  Just  because 
those  who  use  capital  and  labour  are  human, 
and  human  nature  is  selfish  and  for  the  most 
part  short-sighted.  Men  are  created  and 
grow  up  unequal,  but  not  greatly  different. 
They  have  much  the  same  faculties  and 
qualities.  These  differ  in  degree  rather  than 
in  kind,  and  their  combination  varies  in 


244  Honest  Business 

individuals.     With    selfishness   as   the   chief 
motive  power  for  all,  there  is  much  clashing 
when  they  get  to  working  together;  but,  with 
a  clear  understanding  and  a  sound  sense  of 
justice,  a  willingness  to  be  fair  to  each  other, 
instead  of  grabbing  each  for  himself  all  that 
he   can   get,    the   combination   would   worki 
together  smoothly  with  the  best  results  forj 
all.     This  is  an  unattainable  ideal  but  it  car 
be  striven  for. 

Unequal  as  men  are  and  different  as  they 
are  in  the  makeup  of  their  faculties  and 
qualities,  nothing  is  more  unnatural  than  a 
division  into  grades  and  classes,  with  arbi- 
trary lines  of  separation.  Nothing  in  the 
world  is  more  unjust  than  caste,  the  arraying 
together  of  the  relatively  strong  and  fortunate 
against  the  relatively  weak  and  unfortunate, 
with  an  intermediate  grade  of  a  miscel- 
laneous "middle  class."  This  produces  an 
artificial  inequality  and  exaggerates  and 
intensifies  differences,  giving  to  those  who 
have,  taking  from  those  who  have  not,  and 
working  injustice.  This  it  is  that  has  created 
slavery  and  oppression  and  caused  most  of 
the  outrage  and  wrong  that  have  made  the 
misery  of  mankind.  The  human  family  is 
one  and  in  the  industrial  and  social  system 


Conduct  of  Labour  245 

all  should  have  an  equal  chance  to  rise  and  to 
get  on  by  well-directed  effort,  according  to 
their  several  capacities.  For  those  who  are 
forward  to  keep  others  back  and  those  who 
are  above  to  keep  others  down,  does  not  make 
for  progress  and  elevation,  but  greatly 
hinders  the  production  and  distribution  of 
the  benefits  of  the  common  effort.  It  pre- 
vents the  highest  prosperity  and  impairs  the 
general  welfare. 

The  attainment  of  an  ideal  co-operation  for 
the  common  good  is  far  off,  and  we  can  only 
strive  toward  it.  In  the  industrial  system 
as  now  constituted  there  must  be  employers 
and  employed,  capitalists,  salaried  men,  and 
wage  earners.  Those  who  by  inheritance  or 
acquisition  possess  capital,  own  land  and 
buildings  and  the  various  instruments  of 
production,  hold  the  position  of  power  and 
others  must  work  for  them,  the  many  for 
the  few.  The  many,  without  means  except 
strength  of  mind  and  body  to  work,  cannot 
take  possession  of  capital  belonging  to  others 
and  control  and  direct  its  use.  That  is  the 
vision  and  the  dream  of  socialism,  and  it  can 
never  be  realised  while  men  are  created 
unequal  and  cannot  make  themselves  equal. 
So  far  as  present  considerations  go,  we  must 


246  Honest   Business 

accept  the  situation  in  which  some,  much  the 
smaller  number,  are  employers,  and  others, 
much  the  larger  number,  are  employed.  We 
must  also  accept  the  fact  that  most  men  are 
selfish  and  disposed  to  use  power  and  advan- 
tage for  their  own  benefit ;  and  those  men  who 
have  power  and  advantage  are  apt  to  be  more 
rather  than  less  selfish  than  those  who  have 
them  not. 

What  then  are  those  who  are  destined  to  be 
employed  by  others  in  order  to  live  and  get 
on  and  up  in  the  world  to  do  to  insure  their 
share  in  the  fruits  of  their  labour  while  hired 
to  work  with  the  capital  of  others  under  the 
direction  of  its  owners?  We  have  spoken  of 
the  duty  and  obligation  of  those  others  to  give 
them  a  fair  chance  and  grant  them  their  full 
vshare,  willingly  and  for  their  own  good  as  well 
as  the  common  good;  but  that  is  an  ideal 
unattainable  while  human  nature  is  what  it 
is,  and  we  cannot  wait  for  it  to  improve  with- 
out trying  to  help  it  along.  The  employed 
have  a  cause  for  which  they  must  strive  for 
themselves.  They  can  accomplish  little  by 
striving  individually.  Most  of  them  have 
little  capacity  for  striving  and  would  be 
helpless  in  the  effort.  They  would  have  to 
take  what  they  could  get  for  their  labour  or  go 


Conduct  of  Labour  247 

without,  which  was  the  fate  of  hirelings  for 
ages.  They  can  gain  nothing  by  free  com- 
petition for  work  to  do.  That  would  leave 
all  the  advantage  in  the  hands  of  the  em- 
ployers and  many  of  them,  under  the  sway  of 
selfish  motives,  would  make  the  utmost  use 
of  it  for  their  own  immediate  gain.  They 
must  unite  their  forces.  They  must  organise. 
They  must  mass  the  strength  of  numbers 
against  the  power  of  wealth  and  position. 

It  is  not  necessary  to  go  over  again  the  right 
or  the  wisdom  of  labour  organisation.  That 
must  be  taken  for  granted.  It  is  the  pur- 
pose here  to  consider  only  the  duties  and 
obligations  of  labour  when  it  is  organised, 
which,  as  in  the  case  of  capital,  means  the 
duties  and  obligations  of  men  with  responsi- 
bility for  their  acts.  They  are  as  much  bound 
to  be  fair  and  just,  to  do  what  is  right  and 
avoid  what  is  wrong,  as  the  employer,  be  the 
same  a  man  or  a  corporation  directed  by  men. 
Labour  organisation  is  a  representative  insti- 
tution, as  much  so  as  corporate  organisation 
or  political  organisation.  The  men  in  a 
particular  trade  or  occupation  who  organise 
in  a  union  must  have  a  constitution  and  rules, 
or  laws,  and  choose  men  to  represent  them  in 
committees  and  as  officers,  but  they  do  not 


248  Honest   Business 

lose  their  individual  responsibility  in  the 
choice  any  more  than  stockholders  in  a  cor- 
poration who  delegate  power  to  their  direct- 
ors and  officers,  or  citizens  who  choose 
representatives  and  officers  for  their  govern- 
ment. The  character  and  conduct  of  the 
institution  will  depend  upon  its  constituents 
who  delegate  their  power. 

Now  men  in  labour  organisations  differ  like 
other  men.  They  are  unequal  in  ability  and 
in  capacity.  The  average  may  be  lower,  and 
from  the  conditions  of  their  employment  it 
naturally  will  be  lower,  than  that  of  men 
engaged  in  large  affairs  of  business,  as  that 
of  the  general  mass  of  citizens  is  lower  than 
that  of  those  who  administer  the  affairs  of 
government.  But  there  are  among  them  men 
who  are  in  every  way  equal  to  the  average 
of  those  engaged  in  business  or  in  public 
affairs,  men  who  might  have  been  in  the 
place  of  these  if  the  circumstances  and 
opportunities  of  their  early  life  had  been 
different.  In  labour  unions  everything  de- 
pends upon  the  choice  of  leaders,  those 
who  are  to  take  positions  of  power  and  respon- 
sibility to  act  for  their  constituents.  In  the 
choice  of  these,  responsibility  begins  as  the 
responsibility  for  good  or  bad  governments 


Conduct  of  Labour  249 

begins  with  the  citizens  who  form  political 
organisations  and  choose  representatives  to 
act  for  them. 

It  is  the  first  duty  of  men  who  form  unions 
in  their  several  trades  and  occupations  to 
choose  as  their  representatives  for  the  man- 
agement of  the  affairs  of  the  organisation 
and  the  enforcement  of  its  rules  those  who 
are  the  most  capable  for  that  task,  the  ablest 
and  most  upright,  not  those  who  are  most 
glib  of  speech  or  most  belligerent  in  spirit,  for 
the  object  is  not  to  fight  but  to  work  with  the 
best  effect.  The  declared  purpose  of  the 
union  should  be  just,  and  the  method  of 
promoting  it  fair,  reasonable,  and  honourable. 
Then  it  will  appeal  strongly  for  the  support 
of  all  who  are  disinterested  in  case  of  any 
conflict.  One  object  of  the  union  should  be  to 
educate  its  members  up  to  the  intelligent  per- 
formance of  this  first  duty.  With  the  best  and 
most  capable  men  for  leaders,  for  officers  and 
members  of  committees,  the  union  will  be  best 
fitted  to  cope  with  employers  on  even  terms. 
There  is  as  much  need  of  special  instruction  and 
training  to  fit  men  for  the  duties  of  member- 
ship in  unions  as  there  is  to  fit  them  for  the 
duties  of  citizenship.  The  most  effective 
teachers  ought  to  be  found  in  their  own  ranks. 


250  Honest   Business 

The  chief  advantage  of  labour  organisation 
is  having  the  power  for  what  is  called  "col- 
lective bargaining, "  the  making  of  contracts 
for  employment  upon  prescribed  terms  as  to 
hours,  wages,  and  other  conditions  of  labour. 
Why  should  not  workmen,  if  intelligent  and 
reasonable,  have  the  same  right  to  make 
contracts  for  their  labour  and  service  that 
employers  have  to  make  contracts  in  their 
buying  and  selling,  and  why  should  not 
employers  be  as  wilting  to  make  contracts  for 
their  labour  force  as  for  their  supplies  and 
their  marketing  of  products,  always  provided 
that  both  parties  are  intelligent  and  rea- 
sonable? It  is  incumbent  upon  both  to  seek 
to  be  fair  and  reasonable  in  all  their  dealings, 
whether  with  labour  or  with  capital,  and  in 
the  long  run  it  will  be  the  best  policy  for  both 
and  for  the  industrial  community  at  large. 
It  will  be  best  for  the  welfare  of  all  the  people. 
It  will  make  labour  organisation  successful, 
and  the  advantage  of  it  will  be  mutual  for 
employers  and  employed. 

But  let  us  never  forget  that  it  will  not  make 
men  equal  in  capacity  or  their  labour  equal  in 
value.  Using  unions  as  a  means  of  levelling 
men  is  a  serious  mistake,  as  we  have  said 
before.  It  will  inevitably  be  a  levelling  down 


Conduct  of  Labour  251 

rather  than  up,  and  there  should  be  no 
attempt  at  fixing  an  average  for  work  done, 
whether  in  quantity  or  quality,  or  in  compen- 
sation. Every  man  should  be  encouraged 
always  and  everywhere  to  do  his  best,  and 
should  receive  compensation  determined  by 
the  value  of  his  work.  There  could  be  no 
greater  mistake  than  impairing  the  efficiency 
of  labour,  so  that  a  body  of  men  employed 
shall  do  less  and  do  it  less  well  than  they 
are  able  to  do  it.  That  can  only  diminish 
production  and  lessen  the  amount  to  be 
divided  among  those  instrumental  in  pro- 
ducing. It  will  be  an  injury  to  all,  to  the 
employed  no.  less  than  to  the  employers. 
A  rigid  wage  system,  with  fixed  scales  per 
hour  or  per  day,  is  inequitable.  In  some 
occupations  a  fixed  minimum,  a  "living 
wage,"  may  be  desirable,  but  so  far  as 
practicable,  compensation  should  be  appor- 
tioned according  to  work  done,  in  amount 
and  in  quality,  that  is,  in  value.  This  can 
be  done  by  piecework  and  profit-sharing  in 
most  cases,  if  a  spirit  of  fairness  prevails  on 
both  sides  of  the  bargaining.  It  is  a  problem 
that  can  be  worked  out  in  the  relation  of 
employers  and  workmen  as  well  as  in  other 
relations  between  men.  But  workmen,  as 


253  Honest   Business 

well  as  others,  must  be  reconciled  to  the 
self-evident  truth  of  inequality  among  men, 
and  acknowledge  differences  of  capacity  and 
of  value.  They  must  admit  the  importance 
to  them  of  capital  and  of  ability  in  manage- 
ment, and  the  justice  of  allowing  to  these  a 
compensation  proportioned  to  their  part  in 
producing  results.  They  must  above  all 
appreciate  the  value  of  efficiency  and  of 
economy  in  cost,  so  that  the  largest  product 
may  be  assured  from  the  united  or  joint 
effort. 

The  way  to  get  shorter  hours  and  better 
pay,  and  to  give  employment  to  all  who  are 
able  and  willing  to  work,  is  to  attain  the 
highest  efficiency  in  producing  results.  The 
way  to  obtain  more  pay  for  eight  hours  a  day 
than  for  ten  or  twelve,  is  to  do  more  and 
better  work  in  that  shorter  time,  which  in 
many  occupations  is  quite  possible,  but, 
in  order  to  have  the  pay  really  worth  more, 
the  production  must  be  larger,  so  that  more 
of  the  fruits  of  labour  can  be  got  with  it. 
The  idea  that  there  is  only  so  much  to  be  done 
and  so  much  to  be  had  for  it  is  a  fallacy.  It 
is  only  a  question  of  how  much  men  are  able 
and  willing  to  do  with  the  resources  of  nature 
and  the  opportunities  of  life;  and  they  can, 


Conduct  of  Labour  253 

within  the  limits  of  what  these  offer,  deter- 
mine their  own  income  and  standard  of  living. 

There  is  no  way  of  making  all  competent 
and  willing,  except  by  the  slow  process  of 
improving  the  human  race.  It  is  desirable 
that  there  should  be  no  unemployed,  and 
that  what  is  to  be  done  should  be  equitably 
apportioned  among  those  who  are  able  and 
willing  to  work;  but,  unfortunately,  there  are 
the  hopelessly  incompetent  and  lazy  and  there 
are  always  the  defective,  the  weak,  and  the 
disabled.  They  cannot  be  cast  out  and  the 
best  should  be  made  of  them  and  done  for 
them  by  such  wise  and  humane  means  as  can 
be  devised.  They  have  to  be  reckoned  with. 
Organisations  of  employers  and  of  workmen 
and  the  social  and  political  organisations 
have  their  part  in  this  perplexing  problem. 
But  that  is  outside  of  the  general  economic 
situation  of  the  worker  and  the  employer  of 
labour. 

It  is  desirable  in  the  highly  organised 
industries  of  the  present  age  that  the  labour 
forces  should  be  organised  in  all  employ- 
ments in  which  large  numbers  are  engaged 
in  one  establishment  or  under  one  manage- 
ment. It  is  the  right  of  workmen  as  of 
capitalists  to  organise  and  co-operate,  but  it 


254  Honest   Business 

is  not  an  obligation.  The  right  to  do  includes 
the  right  not  to  do.  It  should  not  only  be 
made  an  advantage  for  the  workman  to 
belong  to  his  union,  but  an  advantage  for 
the  employer  to  deal  with  the  union;  but 
there  should  be  no  coercion  and  no  inter- 
ference with  the  right  of  the  non-union  man 
any  more  than  with  the  individual  employer. 
If  the  unions  make  it  a  benefit  for  workmen 
in  different  trades  and  occupations  to  belong 
to  them  and  a  benefit  for  employers  to  have 
them  belong  to  them,  there  will  be  nothing 
to  fear  from  the  competition  of  those  who 
choose  to  stay  out. 

Labour,  in  the  sense  of  men  engaged  in 
labour  for  hire,  owes  the  same  duty  to  society 
and  to  the  state  that  capital,  in  the  sense  of 
men  who  use  capital,  owe  to  it,  the  duty  of 
regarding  the  rights  of  others  and  obeying 
the  laws  which  they  take  part  or  should  take 
part  in  making.  They  may  refuse  to  work  for 
a  particular  employer  or  to  work  at  all  except 
on  their  own  terms;  but  they  have  no  right 
to  prevent  others  from  working,  no  right  to 
interfere  with  the  property  or  the  operations 
of  those  for  whom  they  refuse  to  work,  no 
right  to  break  any  law  or  cause  any  public 
disorder  because  their  terms  of  labour  are  not 


Conduct  of  Labour  255 

complied  with  and  they  refuse  to  accept 
any  other.  Tactics  of  coercion,  intimidation, 
and  violence,  of  doing  injury  to  gain  a  benefit, 
may  serve  a  temporary  purpose,  but  the  bene- 
fit will  not  be  lasting  and  in  the  long  run  the 
policy  will  prove  a  losing  one. 

There  ought  also  to  be  an  amicable  co- 
operation between  workmen  and  employers 
in  what  is  called  "welfare  work,"  arrange- 
ments for  the  health  and  comfort  and  the 
general  enlightenment  and  improvement  of 
the  working  force  and  their  families.  It  is 
not  a  charitable  or  philanthropic  affair,  but 
a  matter  of  mutual  interest  and  advantage,  in 
which  all  should  take  part,  sharing  in  the 
burden  as  well  as  the  benefits.  Sometimes 
when  employers  endeavour  to  carry  out  wel- 
fare measures  for  their  workmen,  they  are 
hindered  instead  of  helped.  They  are  ex- 
pected to  do  all  the  work  or  have  it  done  and 
bear  all  the  expense,  while  self-respect  and  a 
sense  of  independence  require  the  workmen  to 
do  their  fair  share.  For  both  the  effort 
fairly  adjusted  would  have  its  recompense, 
greater  than  the  cost  in  time  or  outlay.  It 
would  not  in  the  long  run  deduct  from  wages 
or  from  profit.  We  are  to  remember  always 
that  real  wages  and  profit,  while  reckoned 


256  Honest   Business 

in  money,  are  measured  by  what  they  bring 
in  the  substance  that  supports  life  and 
contributes  to  its  satisfactions. 

There  are  ways  and  means  of  providing 
against  the  exigencies  of  accident,  sickness, 
and  old  age  which  impair  or  destroy  the 
capacity  for  work  temporarily  or  perma- 
nently. In  the  working  force  of  every  industry 
and  every  establishment  employing  numbers 
of  people  there  ought  to  be  provision  of  this 
kind  adequate  to  prevent  suffering  and 
privation  that  can  be  avoided.  The  duty 
and  obligation  of  making  such  provision 
should  be  appreciated  by  both  employers  and 
employed,  by  both  capital  and  labour,  and 
should  be  met  by  co-operation  in  the  neces- 
sary effort  and  in  supplying  the  necessary 
means  from  the  common  earnings. 

It  would  be  well  if  all  such  insurance 
arrangements  could  be  voluntary  and  ad- 
justed on  a  perfectly  fair  basis  without  inter- 
ference of  other  authority  than  that  of 
organisations  of  capital  and  labour;  but  there 
are  the  obstacles  of  selfishness  and  short- 
sightedness in  human  nature,  the  lack  of  a 
spirit  of  mutual  helpfulness,  which  require 
something  in  the  way  of  compulsion  and 
regulation  by  public  authority  to  get  ade- 


Conduct  of  Labour  257 

quate  results.  Even  then  the  results  will  be 
imperfect  compared  with  what  they  might 
be  with  voluntary  co-operation  in  a  proper 
spirit.  It  is  the  defects  and  deficiencies  of 
human  nature  that  make  any  laws  necessary. 
These  also  prevent  us  from  obtaining  the 
best  laws  and  getting  them  properly  adminis- 
tered. But  we  cannot  get  along  without 
laws,  and  must  strive  to  get  the  best  we  can 
and  have  them  applied  as  well  as  we  can. 
It  is  as  necessary  to  have  the  exercise  of 
some  public  authority  to  get  labour  to  observe 
its  duties  and  obligations  as  to  get  capital 
to  observe  its  duties  and  obligations,  in 
their  several  relations  to  society  and  to  the 
state.  These  do  not  constitute  two  separate 
classes  under  the  law,  to  be  treated  according 
to  different  principles  of  justice  and  equity. 
Neither  should  have  privileges  or  immunities 
which  the  other  does  not  have,  or  be  subject 
to  requirements  or  restraints  which  do  not 
apply  to  the  other  under  like  circumstances 
and  conditions.  With  their  organisations, 
with  their  co-operative  plans  and  their  mutual 
interests,  the  old  relation  of  "master  and  ser- 
vant" must  disappear  and  that  of  a  qualified 
partnership  must  take  its  place.  This,  too, 
may  be  an  ideal,  but  it  is  the  goal  toward 

17 


258  Honest  Business 

which  we  are  tending  and  for  which  we  may 
as  well  direct  our  efforts.  The  rule  of  the 
plutocrat  is  passing.  He  is  not  a  superior 
being  entitled  to  the  earth  and  the  fulness 
thereof.  There  must  be  a  diffusion  of  con- 
trol over  the  forces  of  production  and  a  more 
equitable  distribution  of  its  fruits,  and  with  it 
must  go  a  fair  apportionment  of  responsibility. 
This  brings  us  again  to  the  conclusion  that 
labour,  as  well  as  capital,  should  be  held  to 
legal  responsibility  in  keeping  contracts.  If 
workmen  are  to  make  contracts  with  employ- 
ers there  must  be  the  means  of  holding  them 
to  their  fulfilment.  If  labour  organisations, 
as  unions,  are  to  enter  into  agreements 
with  capital  organisations  as  corporations  or 
associations,  there  must  be  means  of  com- 
pelling them  to  abide  by  their  agreements  or 
suffer  prescribed  penalties.  They  should  be 
incorporated  and  held  responsible  for  their 
acts.  Their  funds  should  be  liable  for  costs 
and  forfeitures  and  their  officers  and  directors 
should  be  subject  to  penalties  for  violations  of 
law.  There  should  be  legal  methods  for  the 
adjudication  of  claims  and  the  settlement  of 
disputes  between  employers  of  labour  and  the 
workmen  employed,  as  well  as  between  manu- 
facturers and  dealers  in  merchandise  or 


259 

shippers   and    carriers   of   the   products   of 
labour. 

That  industries  should  be  stopped  and 
transportation  interrupted  by  strikes  on  ac- 
count of  disputes  over  wages  or  conditions 
of  labour,  without  any  means  of  adjudicating 
the  controversy  which  shall  be  binding  on  the 
parties  and  shall  clear  the  way  for  going 
on  with  business,  is  intolerable.  Organised 
labour  is  no  more  entitled  than  organised 
capital  to  violate  the  rights  of  others  and  dis- 
regard the  interests  of  the  community  without 
means  of  redress.  If  it  is  made  up  and 
directed  by  men  of  intelligence,  a  sense  of 
justice,  and  an  appreciation  of  the  demands  of 
equality  before  the  law  and  under  govern- 
ment, there  will  be  no  desire  for  such  dis- 
crimination in  its  favour.  Where  there  is 
Democratic  government  there  must  be 
equality  before  the  law  or  the  government 
cannot  endure.  There  should  be  no  dis- 
crimination against  the  many  who  have  not 
wealth,  and  have  not  power  except  in  the 
combination  of  numbers,  or  in  favour  of  a 
privileged  few.  Discrimination  in  favour  of 
the  many  and  against  the  few  who  have  the 
power  that  comes  from  superior  ability  and 
wealth  legitimately  acquired  and  justly  used, 


260  Honest  Business 

would  not  long  be  tolerated.  It  would  mean 
revolution  and  the  wrong  would  not  long 
prevail.  Positions  would  again  become  re- 
versed and  society,  in  defence  of  its  organised 
forces  and  the  preservation  of  the  common 
weal,  would  have  to  endure  oligarchy,  or  the 
rule  of  the  few,  in  some  form  as  a  less  evil 
than  anarchy  of  the  many. 


XIX 

EXTREMES  OF  POVERTY  AND  RICHES 

THE  modern  development  of  industry,  and 
of  the  trade  by  which  the  products 
of  industry  are  disseminated,  the  extensive 
application  of  "labour-saving"  machinery 
and  devices  for  increasing  the  productiveness 
of  labour,  and  the  organisation  of  capital  on  a 
great  scale,  have  resulted  in  a  vast  increase 
in  the  production,  distribution,  and  accumula- 
tion of  those  things  which  constitute  wealth. 
This  increase  has  been  greatly  out  of  pro- 
portion to  the  increase  of  population  in 
countries  in  which  it  has  taken  place.  A 
large  proportion  of  the  increase  has  gone 
into  consumption  during  the  process  of 
production,  raising  what  is  called  the  "stand- 
ard of  living,"  but  another  large  proportion 
has  taken  more  or  less  permament  forms  and 
has  added  to  accumulated  wealth  in  both 
public  and  private  hands.  To  what  extent 
has  this  increased  wealth  been  diffused 
261 


262  Honest   Business 

among  the  people  to  enhance  the  general 
well-being? 

There  is  no  doubt  that  the  condition  of 
what  is  called  the  working  class,  or  the  wage- 
earners  in  industry  and  trade,  has  been 
improved.  As  a  whole  their  standard  of 
living  is  higher;  their  subsistence  has  been 
made  more  comfortable;  they  are  better 
housed,  better  fed,  and  better  clothed  than 
in  former  times.  Life  is  made  easier  for 
them,  and  their  intelligence  has  been  stimu- 
lated and  trained  by  far  better  and  more 
widely  diffused  education.  But,  notwith- 
standing the  great  increase  of  wealth  and  the 
generally  improved  condition,  there  is  the 
glaring  and  depressing  fact  that  greater  ex- 
tremes of  poverty  and  misery  and  of  riches 
and  luxury  exist  than  ever  before.  There 
is  greater  inequality  of  social  conditions. 
Something  prevents  a  just  diffusion  of  the 
blessings  of  prosperity  and  perpetuates,  even 
intensifies,  the  distress  of  adversity. 

The  poverty  that  has  attended  progress  is 
not  to  be  attributed  to  any  one  cause.  Many 
causes  have  contributed  to  its  survival  at 
the  submerged  bottom  of  a  scale  that  ranges 
upward  through  bare  comfort,  moderate 
means,  and  generous  wealth  to  colossal 


Poverty  and  RicKes  263 

riches.  The  cause  is  not  only  the  private 
ownership  of  land,  which  is  a  monopoly,  in 
the  sense  that  the  actual  supply  cannot 
be  increased  by  human  effort  though 
neglected  areas  may  still  be  brought  into  use 
and  that  in  use  can  be  made  to  contribute 
more  to  the  production  of  wealth.  It  is  not 
wholly  due  to  the  selfish  greed  and  the  over- 
mastering power  of  the  strong,  wresting  more 
than  their  share  from  the  weaker  and  grinding 
down  the  great  mass  of  those  of  humble 
capacity  and  unfavourable  environment, 
though  that  is  a  powerful  factor. 

In  the  great  inequality  of  mankind,  and 
under  the  pressure  of  social  development, 
there  have  always  been  and  still  are  many 
at  the  bottom  of  the  scale  who  from  one  defect 
or  another  are  inefficient,  incapable  of  making 
a  comfortable  living,  and  efforts  to  move  them 
onward  and  upward  are  often  unavailing. 
Here  and  there,  and  in  spots  everywhere, 
they  become  a  stolid,  sodden  mass,  partly 
from  innate  faults  and  partly  from  conditions 
that  surround  their  birth  and  breeding  and 
from  lack  of  systematic  efforts  to  lift  them 
and  move  them  along.  There  are  those  who 
are  born  physically,  mentally,  and  morally 
weak  and  can  never  be  made  otherwise. 


264  Honest   Business 

They  have  little  strength,  less  energy,  and  no 
ambition,  and  are  destined  to  poverty  and 
to  misery  unless  others  take  care  of  them. 
Some  have  appetites  and  propensities  that 
are  uncontrolled,  sometimes  uncontrollable, 
which  make  them  averse  to  working  that 
they  may  live  better,  and  disposed  to  waste 
upon  foolish  or  vicious  indulgence  all  that 
comes  to  their  hands. 

Those  who  are  fated  by  birth  to  a  life 
of  poverty  most  commonly  find  themselves 
surrounded  by  conditions  which  confirm  their 
destiny.  But  amid  similar  conditions  are 
born  many  who,  if  otherwise  situated,  would 
be  capable  of  escaping  poverty,  and  not  only 
willing  but  eager  to  do  so,  but  who  are  kept 
down  by  the  thraldom  of  their  environment 
and  never  develop  the  qualities  of  which  the 
germs  were  born  in  them.  There  is  poverty 
that  comes  from  misfortune,  from  calamity, 
and  "unmerciful  disaster,"  which  is  not  to 
be  attributed  to  natural  defects  or  wilful 
faults  of  the  victims,  but  which  is  left  in  the 
general  welter,  where  disease,  vice,  and  crime, 
as  well  as  pauperism,  are  bred  and  pro- 
pagated as  a  scourge  to  the  society  that 
allows  the  pestilent  conditions  to  continue. 
Efforts  are  made  to  purify  and  protect  the 


Poverty  and  RicKes  265 

sources  of  water  supply  and  the  marts  for  food, 
to  drain  and  cleanse  the  streets  and  highways, 
and  to  guard  the  general  health  from  infection, 
but  the  springs  and  reservoirs  and  cesspools 
of  humanity,  the  moral  and  social  pestholes 
that  sap  the  economic  strength  of  the  com- 
munity, receive  scant  attention. 

Poverty  is  relative,  and  its  causes  have 
their  degrees.  The  qualities  and  the  defects 
of  human  nature  range  through  all  grades 
and  coalesce  in  all  manner  of  combinations  in 
individuals.  Equal  capacities,  equal  results, 
and  equal  conditions  are  not  to  be  looked  for ; 
but  those  who  are  capable  of  work  and  willing 
to  work  are  in  great  numbers  poorer  than 
they  ought  to  be  through  no  fault  of  their 
own.  There  are  from  time  to  time  and  in 
some  places  all  the  time  many  unemployed 
and  many  underpaid.  Why  should  those 

^g^BB*"^^ 

who  are  able  to  work  and  willing  to  work  and 
who  depend  upon  constant  labour  for  their 
living  be  without  employment  whereby  to 
live  from  day  to  day?  Is  it  because  in 
this  world  there  is  nothing  their  hands  can 
find  to  do,  or  nothing  that  needs  to  be 
done  or  would  yield  the  means  of  living  if 
done?  «* 

The  economic  system  is  made  too  rigid 


266  Honest    Business 

by  old  theories  and  modern  methods.  The 
Qjoctrine  of  laissez-faire  and  the  policy  of 
sustained  competition  are  carried  too  far. 
The  motive  of  individual  selfishness  is  too 
dominating  to  let  live  as  well  as  to  live. 
This  dominating  motive  in  a  complex  and 
largely  artificial  system  is  the  chief  cause  of 
vicissitudes  in  industries  and  in  the  trade 
that  disseminates  and  distributes  the  proceeds 
of  industry.  In  its  eagerness  it  overproduces 
when  there  is  immediate  profit  for  those 
who  control  capital.  It  makes  supply  out-_ 
rSri  demand  at  such  tiffl65T  Sfld  prices  go  down/ 
ItT  incites  speculation  and  the  taking  of 
chances,  the  extension  of  credit  and  borrow- 
ing of  a  future  that  looks  alluring.  This 
brings  on  crises  and  reactions.  Settlements 
are  forced  and  depression  comes,  stoppage 
of  industries,  lowering  of  wages,  and  men  out 
o7  work.  No  systematic  effort  is  made  to 
adjust  conditions  for  the  common  benefit 
of  capital  and  labour,  to  keep  things  going 
steadily,  because  selfishness  has  ruled  with 
those  in  a  position  to  gain  by  the  sacrifice. 
After  depression  recovery  is  slow  and  painful^ 
The  poof  struggle  along  and  the  more  fortu- 
nate grasp  all  they  can  get. 

In   ordinary   times   of   steady   work   and 


Poverty  and  RicHes  267 

"good  business"  there  is  still  much  unem- 
ployment and  underpay  because  those  who 
have  are  unwilling  to  yield  anything  for  the 
sake  of  those  who  have  not.  Workingmen 
who  are  employed,  whether  organised  or  not, 
insist  upon  having  all  they  can  get  out  of  the 
work  in  hand,  letting  no  more  in  to  share  the 
opportunity  by  shortening  time  to  increase 
the  number  employed  unless  the  rate  of  wages 
is  kept  up  for  all  without  any  addition  to 
production.  They  try  to  keep  down  the 
number  trained  to  their  several  trades,  which 
tends  to  unemployment  of  thousands.  They 
wish  to  shorten  hours  of  labour  but  are  not 
willing  to  diminish  pay  per  hour  or  to  increase 
efficiency.  They  make  the  false  assumption 
that  in  a  particular  industry  there  is  a  fixed 
limit  of  production  and  only  so  much  to  do  and 
to  be  earned,  whereas  nothing  is  more  elastic 
than  the  limit  of  production.  Much  more 
could  be  done  in  the  same  time  or  even  in 
a  shorter  time  by  increased  efficiency,  and 
more  persons  could  be  employed  at  the 
same  cost  with  the  result  of  a  larger  product 
to  be  distributed.  No  competent  workman 
need  be  unemployed  if  employment  in  the 
various  occupations  is  fairly  apportioned 
among  the  applicants,  but  those  who  have 


268  Honest  Business 

will  yield  nothing  to  give  a  chance  to  those 
who  have  not. 

Employers  display  the  same  spirit  of 
selfishness.  They  will  pay  no  more  than 
they  have  to  pay  for  the  labour  they  require ; 
and  at  the  "prevailing  rate  of  wages"  they 
will  make  the  hours  as  long  as  they  can 
and  employ  no  more  persons  than  they  think 
necessary  for  the  work  they  have  to  do. 
They  will  concede  nothing  in  their  profits  if 
they  can  help  it.  They  feel  no  responsibility 
for  the  unemployed  and  no  motive  for  giving 
them  a  chance.  The  system  of  competition 
in  labour  and  in  the  business  that  employs 
labour,  unrestrained  by  moral  considerations, 
produces  this  result  of  many  at  all  times  who 
cannot  get  work,  many  depressed  and  dis- 
couraged, many  miserably  poor,  who  might 
under  a  humane  system  make  a  comfortable 
living.  The  net  result  of  inventions,  improve- 
ments, and  progress,  which  have  multiplied 
the  fruits  of  production  in  proportion  to  the 
number  among  whom  they  are  to  be  divided 
is  a  higher  average  well-being,  but  extremes 
of  poverty  and  riches  are  wider  apart  than 
ever.  The  poverty  itself  may  not  be  more 
extreme  absolutely,  but  it  is  relatively  so, 
and  the  riches  are  far  more  excessive.  The 


Poverty  and  Riches  269 

distribution  is  more  inequitable  than  in 
times  of  slavery  or  the  acknowledged  depend- 
ence of  the  poor  upon  the  beneficence  of  the 
rich. 

The  extreme  of  riches  is  no  less  demoralis- 
ing than  the  extreme  of  poverty.     The  latter 
makes  for  crime  and  vice,  degradation  and 
desperation, — decadence    at    the    bottom  of 
society.      The    former   makes    for    luxury, 
extravagance,  and   folly, — degeneration  and 
decay  on  the  upper  surface  of  society.     The 
wholesome  mass  is  infected  by  both.     The 
getting  of  great  riches  is  a  besotting  process. 
Large  wealth  may  be  acquired  by  superior"""\ 
ability,  efficient  methods,  and  conduct  both 
righteous  and  wise,  and  it  may  be  used  in   • 
a   manner    to    benefit  human   society   and  | 
exalt  the  possessor.     There  is  comparatively\ 
little  of  such.     Great  riches  are  more  com-^ 
monly  obtained  by  ruthlessly  using  advant- 
age and  power  to  extract  substance  from  the 
many  and  gather  it  into  the  hands  of  the  few, 
to  be  used  to  satisfy  their  desires  and  gratify 
their  tastes.  1 

These  few,  having  by  inheritance,  by  un- 
scrupulous energy,  by  eager  striving,  or  by 
favouring  circumstances,  acquired  large  con- 
trol of  capital  in  land,  in  structures  and 


270  Honest   Business 

facilities,  and  of  organisation  engaged  in  the 
work  of  production  and  distribution  of  the 
things  which  constitute  wealth,  have  used 
the  power  thus  acquired  to  gather  as  much 
as  possible  into  their  own  keeping  and  to 
leave  as  little  as  possible  to  others  on  the 
way  from  the  sources  of  nature  to  the  marts 
at  which  human  wants  are  supplied.  Motives 
vary  in  degrees  of  selfishness  and  lack  of 
moral  scruple,  but  this  draining  from  fhe 
many  to  enrich  the  few  is  the  inevitable  result 
of  unrestrained  competition,  of  that  struggle 
for  life  in  which  only  the  "  fittest, "  that  is, 
the  strongest,  survive.  Every  step  in  what  is 
called  industrial  development  and  progress 
has  been  toward  this  result. 

There  is  a  common  notion  of  economic 
advantage  in  the  lavish  expenditure  of  the 
rich,  inasmuch  as  it  gives  employment  to 
labour  in  producing  what  they  squander, 
and  stimulates  trade,  in  which  many  are 
engaged.  That  notion  is  utterly  fallacious. 
There  is  nothing  but  economic  waste  and 
loss  in  extravagance  or  luxurious  indulgence 
and  display.  The  destruction  of  wealth  by 
the  violence  of  mobs  or  of  war,  by  fire  and 
flood,  by  whirlwind  or  earthquake,  by  any  of 
the  accidents  and  disasters  that  beset  human 


Poverty  and  RicHes  271 

life,  makes  work  and  stimulates  energy  in 
repairing  the  damage  and  the  loss;  but  the 
damage  and  loss  are  real  and  the  restoration 
is  not  gain,  any  more  than  the  recovery  of 
health  that  never  needed  to  be  lost  is  gain. 
The  reparation  is  never  complete. 

He  that  has  riches  legitimately  obtained  is 
entitled  to  indulge  his  taste  for  the  finer 
things  of  life.  There  is  a  benefit  to  all 
in  cultivating  the  elegancies  and  refinements 
of  civilised  society,  in  fine  houses  and  grounds, 
in  equipages  and  adornments,  in  the  arts  and 
accomplishments  which  appeal  to  the  esthetic 
sense,  exalt  and  purify  sentiment,  and  excite 
a  healthy  emulation.  There  is  benefit  in 
rational  diversions  and  recreations.  All 
these  things  have  their  strengthening,  ele- 
vating, or  refining  influence,  and  they  can 
only  be  had  by  a  certain  concentration  of 
wealth.  There  is  benefit  to  the  community 
in  civic  embellishments,  the  provision  of 
museums  and  galleries,  recreation  grounds, 
and  a  general  aspect  of  prosperous  life;  and 
to  these  individual  wealth  contributes.  The 
rich  may  be  benefactors  and  many  of  them 
are  so.  A  few  find  more  satisfaction  in 
benefaction  to  their  fellow-men  and  to  society 
and  the  state  than  in  self-indulgence  even  of 


* 

r- 


272  Honest   Business 

the  enlightened  kind  which  benefits  rather 
than  injures  themselves  and  their  families. 
Such  usually  win  their  wealth  by  honourable 
means  and  deserve  to  be  rich.  Nobody 
begrudges  them  what  they  have,  and  if  they 
are  envied  it  is  for  what  they  are  able  to  do  for 
others  and  the  gratification  they  find  in  a 
beneficent  use  of  wealth.  They  are  a  bless- 
ing to  their  fellow-men  and  quite  fit  for  the 
Kingdom  of  Heaven. 

But  there  are  others, — "plutocrats," 
predatory  rich,"  sometimes  "malefactors 
of  great  wealth";  and  modern  conditions 
tend  strongly  to  the  breeding  of  such.  What 
they  squander  in  luxurious  living  and  vulgar 
pleasures  is  wasted  and  lost  from  the  general 
stock  that  has  been  produced  by  labour  for 
the  common  support.  At  every  extravagant 
banquet  there  is  enough  wasted  to  supply 
a  score  of  poor  families  for  many  days.  The 
daily  waste  at  expensive  hotels  and  restau- 
rants, to  say  nothing  of  the  private  tables  of 
the  rich,  would  relieve  the  hunger  of  thou- 
sands. The  deplorable  thing  is  not  that  this 
is  not  saved  and  distributed  to  the  poor. 
That  is  not  the  kind  or  manner  of  relief  to  be 
desired.  Nevertheless,  the  vast  waste  of 
material  in  this  way  so  depletes  the  common 


Poverty  and  RicHes  273 

stock  of  what  is  produced  and  distributed  as 
to  add  greatly  to  the  cost  of  living  of  those 
who  are  able  to  buy  only  what  they  must 
have.  The  cost  of  "high  living"  and  of  the 
squandering  that  accompanies  it  make  high 
the  cost  of  modest  and  humble  living.  The 
rich  can  afford  the  waste  but  the  poor  suffer 
for  it.  It  is  one  of  the  sad  results  of  the 
grossly  inequitable  distribution  of  the  fruits 
of  labour. 

The  squandering  of  the  rich,  the  waste  of 
riotous  living,  may  beget  employment  for 
many  workmen  in  producing  and  preparing 
what  they  consume  or  throw  away,  and  serve 
to  diffuse  a  part  of  their  fat  incomes  among 
those  who  do  the  work  and  those  who  wait  up- 
on them,  but  work  that  has  been  bestowed 
upon  that  which  is  wasted  has  been  itself 
wasted,  and  might  have  been  put  to  better 
use.  The  result  comes  from  a  system  of 
inequitable  distribution  in  which  some  get 
more  than  their  fair  share  and  deprive  others 
of  part  of  what  justly  belongs  to  them,  which 
enables  the  former  to  waste  while  the  latter 
must  scrimp.  It  comes  from  the  twofold 
selfishness  of  the  strong  in  grasping  all  they 
can  get  in  the  process  of  production  and  dis- 
tribution and  in  wasting  upon  themselves  to 

18 


274  Honest   Business 

their  own  harm  a  huge  excess  rather  than 
let  it  go  to  benefit  those  in  need.  Work 
might  have  as  large  and  varied  employment 
and  better  reward  if  the  fruits  of  labour  were 
apportioned  more  equitably  and  many  evils 
of  society  would  be  mitigated  if  not  removed. 
It  is  not  a  question  of  charity  or  philanthropy, 
in  the  much-abused  sense  of  the  term,  but  of 
sound  economy  for  the  benefit  of  society 
s  as  a  whole.  Under  a  system  of  just  division 
the  rich  would  be  really  "better  off"  and  far 
more  respectable,  the  general  comfort  would 
be  greatly  enhanced,  vice  and  crime,  as  well 
as  disease  and  pauperism,  would  be  lessened 
in  large  measure,  to  the  relief  of  society  from 
the  penalties  of  its  own  derelictions. 

The  evil  lies  not  alone  in  the  way  in  which 
wealth  is  wasted.  Before  that  comes  the 
wrong  in  the  way  much  of  it  is  obtained. 
There  is  the  tap  root  of  the  inequity  of  dis- 
tribution. Some  men  are  said  to  make 
money.  What  is  "making  money"?  The 
term  is  used  as  equivalent  to  gaining  wealth, 
to  getting  rich,  not  by  creating  "money," 
which  is  not  wealth  but  a  means  of  trans- 
ferring and  exchanging  it,  nor  yet  by  creating 
the  things  that  constitute  wealth  in  the  meas- 
ure in  which  possession  of  them  is  taken ;  but 


Poverty  and  RicKes  275 

by  gathering  as  much  as  one  can  grasp,  by 
strength,  by  skill,  by  strategy,  by  finesse, 
by  deception,  or  by  main  force,  of  those  things 
which  are  produced  from  the  resources  of 
the  earth  by  labour,  as  they  pass  through  the 
processes  of  production,  distribution,  and 
interchange,  until  they  reach  the  ultimate 
consumer  or  final  possessor.  In  these  pro- 
cesses toll  is  taken  at  every  step  by  those  who 
hold  positions  of  advantage,  and  what  they 
take  is  of  necessity  subtracted  from  that 
which  reaches  others,  lessening  the  supply 
and  increasing  the  cost  of  that  which  is  dis- 
seminated among  the  many  who  are  working 
for  what  they  can  get.  Those  who  get  a 
large  proportion  of  what  comes  within  their 
reach  are  not  "making"  all  they  get.  They 
are  not  giving  full  value  for  what  they  take. 
They  are  only  getting  rich  by  taking  all  they 
can  grasp  of  what  passes  within  their  reach. 
Ordinary  employers  and  every  day  traders 
may  contrive  to  get  labour  at  too  low  wages 
or  to  overwork  it,  and  sell  goods  at  too 
high  prices  or  of  scant  measure  and  quality. 
But  there  are  "plutocrats"  and  "predatory" 
persons  who  manage  to  get  a  large  share  of 
this  world's  goods  at  the  risk  of  missing 
greater  treasures  elsewhere.  They  are  among 


276  Honest   Business 

the  great  undertakers — if  we  may  use  in  a 
literal  sense  an  English  word  commonly 
perverted  from  its  true  meaning — the  ex- 
ploiters and  promoters,  the  mining  kings, 
the  masters  of  industry,  the  magnates  of  cor- 
porations, the  getters-up  of  syndicates  and 
makers  of  "trusts  and  combines."  There 
are  worthy  men  who  use  only  honourable 
methods,  among  those  who  do  the  under- 
taking, the  promoting,  and  managing  of  great 
enterprises  in  industry  and  trade  and  their 
handmaids,  transportation  and  banking;  but 
for  the  most  part  these  do  not  get  enormously 
rich  and  are  not  to  be  classed  as  plutocrats 
or  as  predatory,  much  less  as  malefactors. 
They  may  be  benefactors. 

Those  of  small  capacity  who  indulge  in 
petty  schemes  and  tricks  and  swindling 
devices  may  be  ignored.  They  "make" 
nothing  and  waste  much  that  rightly  belongs 
to  others,  but  their  way  is  strewn  with  the 
bones  of  failure  and  ruin.  Consider  those 
with  big  brains  and  restless  energy,  with 
force  and  capacity,  who  gain  control  of  large 
capital  and  form  and  direct  organisations 
whereby  business  is  done  on  a  vast  scale 
and  with  great  profit.  The  "good  old  rule 
sufficeth  them,"  they  act  upon  the  laissez- 


Poverty  and   RicKes  277 

faire  principle  or  the  doctrine  of  the  survival 
of  the  fittest.  They  treat  the  earth  and  the 
fulness  thereof  as  belonging  to  those  who  are 
able  to  get  the  most  out  of  it.  Sometimes 
they  win  fortunes  at  a  stroke.  When  success- 
ful, as  they  usually  are,  they  get  enormous 
profits  from  the  manipulation  of  values 
which  others  create.  Suppose  they  over- 
capitalise enterprises  and  sell  shares  at 
fictitious  values,  or  make  combinations  to 
put  prices  far  above  cost  and  get  excessive 
profits.  Suppose  by  familiar  devices  by 
which  the  power  of  capital  and  organisation 
is  applied,  on  the  theory  that  "business"  is 
like  the  war  of  elemental  forces,  with  which 
moral  scruples,  ethical  principles  and  reli- 
gious sentiments  have  nothing  to  do,  huge 
fortunes  are  accumulated.  How  are  they 
made?  Where  do  they  come  from?  Who 
has  really  made  the  wealth  of  which  they 
consist? 

This  is  the  question  to  which  we  have  been 
coming.  There  is  one  elementary  principle 
which  the  simplest  mind  can  grasp,  but  which 
runs  like  a  shining  thread  through  all  the 
intricacies  of  the  industrial,  commercial,  and 
financial  network.  Nothing  of  value  can  be 
taken  and  kept  or  accumulated  in  anybody's 


278  Honest   Business 

possession  which  has  not  been  produced  by 
somebody's  labour.  That  labour  may  be  of 
the  hands  or  the  brain.  It  may  use  much 
capital  and  the  appliances  and  facilities  it 
provides.  In  any  case  the  values  have  been 
produced  from  nature's  resources  by  human 
effort.  There  is  no  other  way.  Now,  if  any 
man  or  any  group  or  combination  of  men,  by 
any  means,  methods,  or  devices,  get  and  keep 
more  than  their  efforts  have  been  instrumental 
in  producing,  more  than  they  have  honestly 
earned  by  their  share  in  the  work  that  is  done, 
they  have  abstracted  it  from  the  common 
stock  and  deprived  others  of  their  just  share. 
They  have  "conveyed"  it  from  others  to 
themselves.  They  have  robbed  others.  In 
short,  in  a  moral  sense,  whether  in  a  legal 
sense  or  nut,  they  have  stolen  much  of  it. 


XX 

HONEST  DIVISION  OF  THE  FRUITS  OF  LABOUR 

THE  chief  cause  of  the  industrial  and  social 
unrest  which  has  been  growing  for 
much  more  than  a  generation  is  a  conviction, 
deep-seated  and  widespread,  though  it  may 
not  be  well  reasoned,  that  the  fruits  of  labour 
are  not  fairly  distributed.  It  is  felt  that 
the  conditions  of  life  among  those  who  share 
in  the  work  of  production  are  not  equitable. 
It  cannot  be  reasonably  claimed  that  the 
benefits  should  be  or  can  be  equally  appor- 
tioned among  men ;  but  there  is  ground  for  the 
claim  that  there  is  not  a  fair  apportionment 
in  accordance  with  any  principle  of  equity  or 
justice.  There  is  not  a  thoroughly  honest 
division. 

During  the  process  of  vastly  increased 
production  by  "modern  improvements"  it 
cannot  be  said  that  the  distribution  has  be- 
come less  equitable  than  before,  but  there 
has  not  been  a  commensurate  progress  in 
279 


280  Honest   Business 

that  respect.  In  the  time  of  the  great  con- 
structions and  military  movements  of  ancient 
Egypt  and  Babylon  the  mass  of  mankind  were 
mere  toilers  and  their  condition  was  that  of 
slavery.  They  had  a  bare  subsistence  while 
wealth  was  in  a  few  powerful  hands.  In  the 
classic  days  of  Greece  and  Rome  the  indus- 
trial situation  was  little  better,  except  as  it 
was  mitigated  by  the  plunder  of  conquered 
nations.  During  subsequent  ages  "classes" 
became  established;  aristocracies,  with  in- 
herited privileges  and  possessions;  ecclesi- 
astics, with  power  to  feed  the  church  at  the 
expense  of  the  people,  which  may  have 
been  for  their  moral  and  spiritual  well-being; 
tradesmen  and  bankers,  who  effected  the 
distribution  of  what  labour  produced  and 
took  toll  as  it  passed  through  their  hands; 
the  great  mass,  toiling  as  ever  in  obscurity, 
dependent  for  living  upon  the  work  which 
they  were  compelled  to  do  in  order  to  live. 
Selfishness  reigned  as  it  always  has  in 
human  history.  The  strong  ruled,  the  less 
strong  laboured  and  fought,  and  the  rela- 
tively weak  toiled  on  to  sow  that  others  might 
reap,  to  produce  that  others  might  enjoy. 
With  the  coming  of  machinery  and  steam 
power,  electricity  and  corporations,  mines 


Division  of  Frxiits  of  Labour  281 

and  factories  and  all  the  paraphernalia  of 
modern  industry  and  trade,  with  improved 
processes  and  methods  and  all  the  resources  of 
science,  the  inequality  of  conditions  became 
more  conspicuous,  if  not  relatively  greater. 
There  is  great  inequality  among  producers, 
in  capacity,  in  efficiency,  in  fidelity  to  their 
share  in  the  work  to  be  done  and  great 
inequality  in  the  results  to  be  credited  to 
different  grades  and  character  of  workmen; 
and  it  is  equitable  that  there  should  be 
inequality  in  the  rewards,  in  the  apportion- 
ment of  the  fruits  of  labour  among  those 
who  have  shared  in  the  work  of  producing, 
according  to  their  several  parts  in  creating 
what  is  to  be  apportioned.  Those  who 
contribute  much  to  the  result  are  entitled  to 
receive  much.  Those  who  contribute  little 
must  be  content  to  receive  little.  Those 
who,  being  able,  contribute  nothing  have 
only  themselves  to  blame  that  they  have 
nothing.  Those  who  waste  and  squander 
their  allotment  have  no  right  to  complain 
of  their  lot.  The  actually  incapable  must  be 
borne  as  a  burden.  The  unfortunate  must 
be  cared  for. 

Men    endowed    with    large    ability    and 
abundant  energy  to  organise  and  direct  the 


282  Honest   Business 

forces  of  industry  in  producing  and  dis- 
tributing, contribute  largely  to  results  and  at 
the  same  time  improve  the  opportunities  of 
all  engaged  in  this  work,  increasing  both 
their  number  and  the  contribution  that  each 
is  able  to  make.  They  are  entitled  to  their 
reward.  Those  who  furnish  the  capital  which 
supplies  the  instrumentalities,  the  product 
of  past  labour,  contribute  largely  in  producing 
the  results.  They  are  entitled  to  their  share, 
proportioned  to  their  contribution.  The 
capital  they  supply  may  have  been  created 
by  their  own  effort  and  saved  by  their  pru- 
dence, or  it  may  have  been  derived  from 
others,  but  it  is  theirs  and  they  are  entitled 
to  the  usufruct.  Its  ultimate  source  makes  no 
difference  with  the  contribution  it  makes  to 
the  results  in  which  all  are  to  share. 

A  mass  of  wealth  is  produced  by  the  co- 
operative activity  of  many,  to  be  divided 
among  them  for  their  subsistence,  their  satis- 
faction, or  for  accumulation,  upon  some  prin- 
ciple of  economics  and  ethics.  It  is  not  to  be 
divided  equally,  but  equitably.  Not  to  each 
according  to  his  needs,  but  to  each  according 
to  his  deserts  as  a  partner  in  the  work. 
Granting  all  this,  how  far  is  the  rcsulLJjo 
accordance  with  the  principle?  The  division 


Division  of  Fruits  of  Labour  283 

is  made  on  a  principle  of  economics  based 
solely  upon  the  element  of  human  selfishness, 
which  takes  no  account  of  ethics  or  duty  to 
fellowmen.  It  is  in  accordance  with  that 
"good  old  rule,  the  simple  plan  that  he  shall 
take  who  has  the  power  and  he  shall  keep 
who  can." 

According  to  the  cold-blooded  doctrine  of 
unrestrained  competition,  the  mass  of  work- 
ers, under  the  direction  of  those  presumably 
able  men  who  have  the  control  of  capital 
and  the  management  of  corporate  organisa- 
tion, must  take  what  they  can  get  for  their 
labour.  If  they  are  not  satisfied  they  can 
go  elsewhere.  Others  needing  to  work  in 
order  to  live  will  take  their  places.  If  they 
do  not  find  work  elsewhere  in  the  employ- 
ment they  are  accustomed  to,  they  can  find 
some  other  or  starve.  Different  industries 
are  competing  with  each  other  for  labour. 
Different  employers  in  the  same  industry 
are  competing  with  each  other  for  capable 
workmen.  Wages  must  be  determined  by 
what  they  are  obliged  to  pay  in  order  to  get 
the  needed  labour.  Workmen  must  compete 
with  each  other  for  places  in  one  industry  or 
another  and  take  what  is  offered  or  go  with- 
out. The  race  is  to  the  swift,  the  battle 


284  Honest   Business 

to  the  strong.  The  devil  take  the  hind- 
most. 

It  is  a  barbarous,  inhuman  doctrine,  but  it 
has  prevailed  more  or  less  unadulterated  since 
the  hanging  gardens  of  Babylon  and  the 
pyramids  of  Egypt  were  built,  since  the 
valley  of  the  Nile  has  been  irrigated  by  nature 
and  the  valley  of  the  Euphrates  was  irrigated 
by  devices  of  man.  It  has  been  mitigated  by 
a  higher  civilisation,  it  has  been  softened  in 
spots  by  religion,  but  it  is  the  prevailing  doc- 
trine of  soulless  economics  to-day.  It  is  the 
doctrine  of  the  dependence  of  workmen  upon 
the  benevolence  or  malevolence  of  employers, 
with  these  sentiments  in  competition  for 
profit  at  the  expense  of  wages.  It  is  the 
doctrine  of  the  iron  rule.  It  does  not  result 
in  equitable  distribution  of  the  fruits  of 
labour  or  a  just  diffusion  of  wealth.  It  does 
not  result  in  the  welfare  of  people  or  the 
strength  of  nations. 

What  is  the  defence  against  it?  Not  only 
workmen  of  various  grades,  including  work- 
men with  mind  as  well  as  workmen  with 
muscle,  need  a  defence,  but  society  and  the 
commonwealth  also  need  defence  against  its 
evil  results.  The  only  defence  that  working- 
men  have,  always  giving  "work"  its  wide 


Division  of  Fruits  of  Laboxir  285 

and  true  significance,  lies  in  the  strength  of 
union.  If  employers,  whether  they  be  men 
dominated  by  selfishness  or  soulless  cor- 
porations directed  by  men  under  the  control 
of  self-interest,  act  upon  the  merciless  prin- 
ciple of  competition,  and  with  no  sense  of 
moral  obligation  to  their  fellow-beings  or  of 
social  and  civic  duty,  there  will  be  no  resource 
for  defence  except  the  organisation  of  the 
many  units  of  labour  into  a  cohesive  force 
under  competent  leadership.  Labour  has 
the  same  right  as  capital,  or,  to  put  it  more 
accurately,  working-men  have  the  same  right 
as  employers,  to  organise  their  forces  under 
a  concentrated  direction.  It  is  the  only  way 
in  which  they  can  bargain  on  anything  like 
equal  terms  for  taking  their  part  in  the  work 
of  production  and  securing  their  share  in  the 
proceeds.  It  is  not  only  their  right,  but  it  is 
their  duty  to  themselves  and  their  families 
and  to  the  human  society  of  which  they  are 
an  essential  part. 

In  the  organisation  of  labour,  as  in  the 
organisation  of  capital,  the  few  must  take 
direction,  with  the  consent  of  the  many. 
It  cannot  be  directed  by  the  town-meeting 
method.  In  government  the  people  must  act 
through  representatives.  In  corporate  man- 


286  Honest    Business 

agement  shareholders  must  intrust  their 
power  to  chosen  directors.  Not  less,  but 
rather  more,  in  labour  unionism,  trustees  or 
directors,  officers  and  committees  must  exer- 
cise the  power  if  it  is  to  be  effective.  The 
mass  of  the  members  lack  the  capacity,  in 
knowledge,  understanding,  and  judgment  to 
determine  questions  that  most  concern  their 
well-being.  Many  of  them  have  not  the 
mental  ability  and  training  or  the  time  for 
giving  due  attention  to  them.  They  need 
leaders  whom  they  can  trust,  and  the  best 
they  can  do  is  to  choose  those  who  are  capa- 
ble and  worthy  of  their  confidence.  Every- 
thing depends  upon  the  capacity  and  the 
character  of  those  who  are  intrusted  with 
the  direction  of  labour  organisation.  That 
they  should  be  men  of  ability,  of  integrity, 
and  of  fidelity  to  a  high  sense  of  duty,  is  quite 
as  important  as  that  those  qualities  should  be 
possessed  by  men  who  direct  the  affairs  of 
great  corporations,  even  more  so,  because 
those  for  whom  they  act  are  more  numerous 
and  less  able  to  look  after  their  own  interests. 
The  proceeds  of  industrial  production  are 
distributed  in  the  first  instance  in  profits  to 
capital  and  wages  to  labour,  or  more  properly, 
in  a  return  of  income  to  employers  and 


Division  of  Fruits  of  Labour  287 

investors  of  capital  and  of  pay  to  workmen 
of  one  grade  and  another  for  their  labour. 
Under  the  iron  rule  of  competition  labour 
takes  what  is  offered  to  it  and  capital  divides 
the  rest,  regardless  of  variations  in  the 
aggregate  output.  Labour  organised  under 
the  direction  of  competent  men  should  be 
able  to  bargain  with  capital,  also  under  the 
direction  of  competent  men,  on  something 
like  equal  terms,  as  corporations  and  other 
employers  bargain  with  each  other.  The 
terms  of  their  contracts  should  be  as  equi- 
table as  they  can  be  made.  They  should  be 
ready  to  share  the  fruits  of  prosperity  and  the 
sacrifices  of  adversity  on  equitable  terms,  with 
due  regard  for  absolute  needs  on  the  part  of 
those  who  have  no  resource  but  their  daily 
work. 

It  is  possible  to  develop  from  the  ranks  of 
labour  men  quite  competent  to  act  as  leaders 
in  negotiation  and  agreement  with  represent- 
atives of  employers,  though  it  is  not  always 
easy  to  secure  their  choice  to  positions  of 
responsibility.  The  greatest  need  in  labour 
unionism  is  to  secure  the  ablest  and  most 
trustworthy  men  as  leaders  and  then  to  trust 
and  support  them.  They  should  be  com- 
petent to  judge  of  economic  conditions  and 


288  Honest    Business 

willing  to  comply  with  their  requirements. 
They  should  recognise  the  just  claims  of  capi- 
tal and  of  management  and  the  necessity 
to  industrial  production  of  having  those 
claims  allowed.  There  is  no  greater  mistake 
than  assuming  that  efficiency  in  production 
is  not  as  important  and  as  beneficial  to  work- 
men as  to  employers  of  labour.  It  is  for  the 
interest  of  both  to  make  efficiency  as  high 
as  possible.  The  question  we  are  consider- 
ing is  the  fair  and  equitable  distribution  of 
the  proceeds.  That  cannot  be  effected  by 
restricting  output  in  quantity  or  letting  it 
deteriorate  in  quality.  That  only  lessens  the 
sum  to  be  distributed  and  does  nothing  to 
make  the  distribution  more  equitable.  The 
aim  of  both  parties  to  the  industrial  bargain 
should  be  to  secure  the  fullest  and  best  har- 
vest from  their  joint  efforts,  and  then 
to  secure  the  fairest  division  attainable 
among  those  who  have  contributed  to  the 
result. 

The  one  great  obstacle  to  this  is  obstinate 
selfishness  in  humanity,  the  propensity  of 
men  to  strive  for  all  they  can  get  instead 
of  all  they  are  entitled  to.  That  selfishness 
prevails  on  both  sides  and  will  prevail  until 
higher  motives  gain  the  ascendancy  and  are 


Division  of  Fruits  of  Labour  289 

enforced  by  the  general  standard  of  conduct 
under  which  men  live.  It  is  that  which 
causes  conflict  and  results  in  waste  of  energy 
and  of  the  fruits  of  effort.  It  wrongs  labour 
and  degrades  the  character  of  capital,  and 
it  hinders  the  progress  of  society.  Where  the 
inculcation  of  ethics,  the  teaching  of  morals, 
the  sanction  of  religion,  are  most  needed  is  in 
the  industrial  and  commercial  relations  of 
men.  There  they  are  quite  as  important  as 
in  their  social  and  political  relations,  but  it 
has  been  almost  wholly  neglected  under  the 
influence  of  the  gospel  of  ruthless  com- 
petition. 

Capital,  as  the  personification  of  employers, 
is  a  worse  offender  than  labour  as  the  per- 
sonification of  workers.  It  may  not  be  less 
scrupulous  in  purpose,  but  the  fact  that  it  is 
in  a  position  of  power  and  responsibility 
makes  its  conduct  more  unrighteous  and  the 
consequences  more  injurious.  It  has  labour 
at  a  disadvantage  and  is  in  more  need  of  the 
restraint  of  a  sense  of  justice  and  the  stimulus 
of  a  sense  of  moral  duty.  It  has  less  excuse 
for  yielding  to  the  selfish  impulse,  because  it 
has  less  occasion  to  press  for  all  it  can  get  in 
order  to  make  life  more  comfortable.  As  a 
rule  it  has  at  its  command  greater  intelligence, 


290  Honest    Business 

more  opportunities  for  mental  and  moral 
training,  wider  experience,  and  a  better 
understanding  of  principles  of  conduct.  Such 
superiority  as  it  has  in  capacity  and  in 
position,  which  is  used  to  arrogate  to  itself  a 
disproportionate  share  of  the  fruits  of  pro- 
duction and  of  the  wealth  of  the  community, 
would,  under  the  rule  of  higher  motives, 
enable  it  to  accomplish  easily  what  must 
cost  labour  a  long  and  hard  struggle. 

If  employers  individually,  or  associated 
together,  would  study  their  problems  with  a 
view  to  doing  justice  to  their  employees  as 
much  as  to  themselves,  to  getting  the  most 
and  the  best  out  of  them  in  order  to  share  it 
fairly  with  them,  to  apportioning  benefit 
equitably  between  capital  and  labour  instead 
of  getting  it  all  for  capital  except  as  dogged 
or  violent  resistance  prevents,  they  could 
speedily  bring  about  a  condition  of  industrial 
peace  and  diffused  prosperity.  There  would 
be  fewer  swollen  fortunes,  less  concentration 
of  riches  devoted  to  luxury,  extravagance, 
and  display,  less  waste  and  destruction,  less 
unscrupulous  exercise  of  the  power  of  wealth ; 
but  the  sum  of  the  wealth  of  nations  would  be 
far  greater  and  the  welfare  of  peoples  would 
be  vastly  enhanced.  The  great  corrective  is 


Division  of  Fruits  of  Labour  291 

to  be  found  not  so  much  in  appeals  to  capital- 
ists and  employers  or  to  labourers  and  their 
leaders.  It  depends  more  upon  the  standard 
of  judgment  of  the  community  in  which 
both  live. 

Opinion  rules  and  makes  the  Govern- 
meTit,  whatever  its  iorniT  Men  yield  in 
their~a5nauclto  the  dominant  sentiment 
of  the  society  which  surrounds  them  and 
upon  which  they  depend  for  success.  Many 
employers  would  be  glad  to  respond  to  a 
higher  standard  if  it  could  be  made  effective 
for  all.  If.  they  yield  to  the  lower,  it  is 
because  competition  drives  them  and  the 
sentiment  of  the  community  is  not  exacting 
enough  to  support  them  by  visiting  deserved 
penalties  upon  offenders.  If  the  unscrupu- 
lous are  allowed  to  succeed,  the  scrupulous  are 
tempted  or  coaxed  to  adopt  their  methods. 
Ethical  sentiment  in  the  economic  world 
needs  to  be  stimulated  and  sustained  to 
exact  justice  and  compel  equity  in  the  dis- 
tribution of  that  wealth  which  is  produced 
by  the  united  efforts  of  men  applied  to 
the  bounty  of  nature.  The  teaching  of  the 
school  and  the  church,  of  the  press  and  the 
rostrum,  even  of  the  stage,  needs  to  be  directed 
to  accomplishing  this  result  until  it  becomes 


292  Honest    Business 

disreputable,  as  well  as  degrading,  for  men 
to  possess  more  than  their  fair  and  well- 
earned  share  of  this  world's  goods  or  to  make 
an  evil  use  of  what  they  have. 


XXI 

ETHICS  AND   RELIGION   IN   BUSINESS 

WE  have  already  laid  sufficient  stress 
upon  the  importance  of  persistently 
inculcating  the  lessons  of  truth  and  honesty 
in  the  education  of  the  young  in  the  family 
and  in  the  school.  We  have  referred  to  the 
need  of  a  more  direct  and  constant  influence 
to  the  same  end  in  the  pulpit  and  the  press. 
But  we  are  disposed  to  urge  more  strongly 
upon  the  reader's  attention  the  essential 
relations  of  ethical  and  religious  culture  to 
the  practical  business  of  life.  Churches  and 
religious  organisations,  which  assume  the 
high  function  of  shaping  the  character  and 
directing  the  conduct  of  those  who  are  sub- 
ject to  their  ministrations,  are  in  a  large 
measure  responsible  for  the  prevalence  of  a 
relatively  low  standard  in  industry  and 
trade.  Their  doctrine  of  ethics  and  moral- 
ity may  be  sufficiently  exalted,  and  it  may  be 
insisted  upon  in  theory.  A  formal  respect 
293 


294  Honest    Business 

is  paid  to  it  which  it  may  not  be  fair  to  char- 
acterise as  hypocritical ;  but  those  who  profess 
this  respect  are  apt  to  fall  short  of  conforming 
to  its  requirements  when  they  would  thereby 
lose  or  fail  to  gain  in  their  worldly  efforts. 
In  the  discipline  of  the  church  too  much  stress 
is  laid  upon  belief  and  profession,  and  observ- 
ance of  rites  and  ceremonies,  and  too  little 
upon  conduct  in  the  business  of  every-day 
life. 

The  primal  instincts  are  still  strong  in 
civilised  man.  Most  of  the  "sins"  of  the 
time  and  of  all  time  spring  from  the  instinct 
to  preserve  and  prolong  life,  and  the  equally 
strong  impulse  whose  beneficent  purpose  is  to 
perpetuate  human  life  on  the  planet,  and 
whose  abuse  is  the  cause  of  much  iniquity  and 
misery.  The  desire  to  live  and  the  appetites 
which  accompany  it  are  the  mainspring  of  the 
effort  to  produce  or  to  acquire  in  abundant 
measure  those  things  by  which  life  is  sus- 
tained with  comfort  and  enjoyment^  and 
which  minister  to  its  pleasures.  These  ap- 
petites vary  greatly  in  different  men,  and, 
indulged  selfishly  and  without  rational  re- 
straint, lead  to  extravagance  and  excesses 
which  bring  their  own  penalty.  The  pas- 
sion  implanted  in  man  to  insure  the  perpetu- 


EtKics    and    Religion  295 

ation  of  the  species,  with  the  burdens  and 
responsibilities  of  parenthood,  when  not 
controlled  by  a  high  moral  sense  and  a  due 
regard  for  the  interests  of  society  lead  to 
fearful  wrongs  to  individuals,  to  families, 
and  to  the  general  well-being. 

It  is  largely  to  gratify  these  primal  instincts 
and  impulses  that  men  strive  and  struggle 
for  a  living  or  for  wealth.  They  furnish  the 
chief  incentive  for  labour  and  for  exerting  the 
mental  powers  to  increase  the  production  of 
things  which  minister  to  the  wants,  real  and 
fancied,  natural  and  artificial,  of  the  human 
being.  They  are  necessarily  selfish  in  their 
nature.  In  a  state  of  barbarism  they  cause 
the  strong  to  compel  the  weak  to  work  for 
them.  In  the  ancient  civilisations,  when 
labour  was  comparatively  unproductive,  but 
great  pyramids  and  temples  and  palaces  were 
built,  and  when  potentates,  priests,  and  arm- 
ies were  sustained  in  barbaric  magnificence, 
the  mass  of  mankind  were  ground  down  by 
the  powerful  few  to  a  bare  subsistence  as  the 
reward  for  incessant  toil.  Hence  a  com- 
paratively small  wealthy  and  ruling  class 
and  a  horde  of  slaves  or  a  vast  and  helpless 
proletariat. 

Progress  in  civilisation  for  some  thousands 


296  Honest   Business 

of  years  has  been  a  slow  and  irregular  advance 
from  this  condition  of  humanity.  It  has  yet 
far  to  go  before  its  course  is  finished.  Those 
primal  instincts  still  prevail  to  make  men 
selfish,  unfair  in  their  dealings,  often  mean 
and  cruel  in  the  treatment  of  those  over  whom 
they  have  power.  Such  men  aim  at  increas- 
ing production  to  support  life,  to  gratify 
appetites  and  tastes,  to  minister  to  wants 
and  pleasures,  but  they  prevent  equality  of 
opportunities  and  equity  in  the  distribution 
of  the  proceeds  of  labour.  Most  of  the 

1" T"T»w—1»*™*—'*** 

wrongs  and  vices  of  what  is  called  civilised  so- 
ciety spring  from  an  innate  selfishness  in 
human  nature  which,  properly  guided  and 
restrained,  elevated  in  its  motives,  and  refined 
•  in  its  satisfactions,  is  a  beneficent  force,  neces- 
sary to  progress. 

How  is  it  to  be  so  guided  and  restrained, 
elevated  and  refined?  Not  bv  force  or ^by 
statute  law.  Not  by  education  or  mental 
development  and  intellectual  training  alone. 
Not  solely  by  appeal  to  moral  sense,  which  is 
often  rudimentary,  generally  imperfect,  and 
seldom  entirely  sound.  Ethical  culture 
based  upon  intelligence  and  reason  is  not 
enough.  Besides  the  lower  instincts  and 
impulses  of  the  flesh  there  is  in  man  a  spiritual 


EtKics    and    Religion  297 

impulse,  an  instinctive  or  intuitive  desire 
for  a  higher  and  purer  life,  a,  groping  hope 
for  an  existence  better  and  happier  than  that 
of  which  he  is  conscious  in  the  toil  and 
struggle  of  the  world.  In  short,  there  is  a 
religious  instinct  or  intuition,  stronger  or 
weaker  according  to  temperament  and  de- 
grees of  development.  It  is  through  this 
intuitive  sense  that  man  strives  upward  in 
incessant  conflict  between  the  lower  nature 
of  the  flesh  and  the  higher  nature  of  the  spirit. 
Religious  progress  has  been  as  much  a 
matter  of  evolution  as  the  development  of 
the  physical  world,  the  intellectual  advance- 
ment of  the  race,  the  organisation  of  society, 
and  the  government  of  tribes  and  nations. 
Religion  never  sprang  fully  armed  from  any 
godhead.  As  a  revelation  to  man  it  has 
been  gradually  worked  out  by  man  and 
through  man.  It  has  differed  among  differ- 
ent peoples  and  in  different  ages  among  the 
same  people.  It  has  undergone  many  trans- 
formations and  it  is  still  far  from  harmony  in 
its  conceptions,  its  manifestations,  and  the 
forms  and  methods  of  its  appeal  to  the  soul. 
It  has  no  more  reached  perfection  in  any  of  its 
forms  than  have  the  social  and  political 
institutions  of  mankind. 


298  Honest    Business 

In  the  rude  ages,  when  the  forces  of  nature 
were  little  understood  and  their  manifesta- 
tions seemed  mysterious,  superstition  pre- 
vailed in  its  cruder  forms  and  men  conceived 
of  many  invisible  deities  working  visible 
wonders.  They  personified  the  powers  of 
nature  and  believed  in  various  gods,  perhaps 
with  an  all-powerful  ruler  over  them  and 
over  the  destinies  of  the  world.  All  deities 
have  been  the  conceptions  of  men,  the  best 
that  their  wisest  could  form  as  their  ideal  of 
the  invisible  ruling  power  in  the  visible  uni- 
verse. Man  has  always  created  gods  in  his 
own  image  and  thought  of  some  god  as 
having  created  man  in  his  image.  The 
inference  from  this  natural  tendency  is 
a  likeness  and  relationship  between  the 
finite  soul  of  man  and  the  infinite  soul  of  the 
universe  from  which  it  emanated,  and  under- 
neath this  intuitive  perception  there  may  be  a 
profound  truth.  Knowledge  is  not  the  sole 
evidence  of  truth. 

Warlike  and  despotic  nations  have  had 
warlike  and  despotic  deities,  while  lovers 
of  peace  and  justice  gave  higher  attributes 
to  their  gods  or  their  one  supreme  being. 
Of  all  ancient  people  the  Hebrews  formed 
the  loftiest  conception  of  divine  attributes  be- 


EtHics    and    Religion  299 

cause  they  had  the  highest  conception  of  the 
ideal  qualities  of  humanity.  They  blended 
the  elohim,  or  gods,  of  their  polytheistic 
inheritance,  into  the  one  mighty  deity,  or 
the  Elohim  of  their  later  imagining.  Their 
own  tribal  deity,  Yahweh,  or  Jehovah, 
developed  as  they  advanced  in  their  moral 
and  religious  ideas,  from  a  god  of  battles  and 
vengeance  to  a  god  of  righteousness,  justice, 
and  peace.  Another  long  step  was  taken 
when  the  wonderful  teacher  of  Nazareth,  in 
accordance  with  his  own  nature,  conceived 
of  the  one  God  as  the  loving  father  of  man- 
kind, ready  to  forgive  their  faults  of  weak- 
ness and  waywardness,  even  of  perversity,  if 
they  would  truly  repent,  and  ready  to  help 
them  to  lives  of  purity  and  virtue  if  they 
showed  a  sincere  desire  and  made  a  genuine 
effort  for  it.  Jesus  regarded  himself  as  the 
son  of  God  in  the  same  sense  in  which  all 
might  become  so  by  accepting  the'  divine 

^^^•(•••••••iVBHBB'BB"0***1"'1^ 

fatherhood. 

Christianity  was  planted  and  watered  in 
the  days  of  myth  and  miracle,  before  real 
science  was  born  and  when  philosophy  had  its 
root  in  mythical  conceptions.  The  dogmas  of 
the  early  Church  were  framed  of  mythical 
elements,  largely  derived  from  heathen 


300  Honest    Business 

sources,  but  they  were  wrought  in  sad 
sincerity  by  men  who  exercised  the  highest 
thought  of  which  they  were  capable  and  most 
"potently  and  powerfully"  believed  in  what 
they  taught.  They  were  intent  upon  the 
salvation  of  men,  not  so  much  from  degrad- 
ing vices  and  iniquitous  conduct  in  this 
world  as  from  the  dreadful  fate  to  which 
these  would  consign  them  after  death.  They 
sought  the  joy  of  right-doing  here  and  a  life 
of  eternal  blessedness  hereafter.  The  long 
struggle  with  the  forces  of  evil  is  a  tragic 
tale.  The  process  of  religious  evolution  has 
gone  on  through  the  ages,  and  however 
tenaciously  creeds  and  dogmas  are  clung  to  as 
of  divine  origin,  they  are  slowly  outgrown, 
and,  if  not  cast  off  or  modified,  lose  their 
vital  effect  upon  the  lives  of  men.  They  may 
even  repel  those  who  would  be  attracted 
by  appeals  to  higher  conceptions. 

The  Church  of  to-day  is  far  from  being 
the  Church  of  the  fathers  or  of  the  mediaeval 
monks.  It  is  far  from  being  the  Church  of 
the  Reformation,  of  Calvinism,  or  of  Puritan- 
ism. As  such  it  could  only  hamper  the 
progress  of  thought.  It  can  not  prevent 
that  progress,  and  it  cannot  escape  its  results. 
The  highest  faculty  of  man  is  reason,  and  to 


EtKics    and    Religion  301 

stifle  it  is  not  to  help  his  upward  progress. 
His  moral  sense  needs  the  stimulus  and  sup- 
port of  religious  sentiment  and  emotional 
aspiration,  but  that  should  be  made  to 
harmonise  with  the  highest  thought  and  rea- 
son of  which  he  is  capable  under  the  guidance 
of  the  wisest  of  his  kind. 

The  makers  of  those  ancient  proverbs 
which  teach  that  righteousness  is  identical 
with  wisdom  and  that  all  wickedness  is  folly 
were  deep  thinkers  in  their  generation  and 
were  profoundly  right.  Never  was  there 
greater  need  than  now  of  inculcating  their 
simple  doctrine.  It  is  the  real  essence  of 
the  soundest  religion  to-day.  At  this  stage 
of  human  progress  the  highest  use  of  a  re- 
ligious system  is  to  induce  men  to  do 
what  is  eternally  right  for  themselves  and 
for  the  race,  to  teach  them  that  in  so 
doing  there  is  the  highest  reward  in  this  life 
and  the  surest  safety  in  any  life  that  is  to 
come.  Experience  and  reason  teach  this 
as  well  as  all  sound  philosophy  and  all 
religion  "pure  and  undefiled. "  Salvation 
from  the  results  of  wrong-doing  in  this  life 
is  salvation  for  all  eternity.  It  is  to  be 
compassed  by  acts  and  the  character  which 
is  begotten  by  them  and  which  they  beget, 


302  Honest    Business 

and  not  by  professions  or  beliefs  or  forms 
of  worship. 

It  is  not  to  be  denied  that  these  are  helpful 
and  for  many  natures  essential.  Again  we 
are  reminded  how  men  differ,  how  unequal 
they  are  in  capacities  for  understanding  and 
for  reasoning,  in  moral  tendencies  and  in 
emotional  nature,  in  their  need  of  help  in  the 
struggle  of  life.  There  is  not  only  the  will 
to  believe  that  may  be  more  or  less  enlight- 
ened, but  the  necessity  of  believing  which 
must  be  guided.  Men  cannot  be  made  to 
think  alike  or  to  feel  alike,  and  there_will  be 
diversities  of  belief  in  spite  of  all  effort  at 
harmony;  but  nothing  tends  toward  har- 
mony like  knowledge  and  reason,  as  well  in 
moral  and  religious  sentiment  and  conduct 
^as  in  conclusions  of  science  and  philosophy. 
Appeals  to  emotion  and  aspiration,  to  the 
esthetic  as  well  as  the  ethical  sense,  in  the 
methods  and  accompaniments  of  worship, 
are  not  to  be  deprecated  except  so  far  as  they 
may  be  made  to  blind  reason,  or  hinder  its 
^action.  There  may  be  need  of  faith,  but  the 
more  rational  its  basis  the  more  effective  will 
•  it^be  in^ nyillding  character  and  directing 
conduct. 

Efforts   are   made   to   reconcile   sects   by 


EtHics    and    Religion  303 

agreement  upon  essentials  of  belief.  There 
is  no  essential  of  belief,  but  there  are  essen- 
tials of  conduct  and  upon  these  agreement 
'ought  not  to  be  difficult.  It  is  not  the  pur- 
pose here  to  condemn  any  honest  or  sincere 
belief  or  worship,  but  there  ought  to  be  one 
object  in  all.  That  is  to  save  men  from 
wrong-doing  and  help  them  to  right-going  for 
their  own  sake  and  the  sake  of  others,  right 
here  "on  this  shoal  and  bank  of  time. "  But 
why  all  this  discourse  upon  a  familiar  gospel? 
Because  where  the  higher  ethics  is  most  needed 
and  least  regarded  is  in  those  practical  affairs 
of  life  which  we  call  "business,"  in  the  con- 
duct of  industry,  of  commerce,  and  finance. 
Men  may  profess  a  regard  for  truth  and  hon- 
esty in  the  abstract,  may  be  exemplary  in 
their  social  and  domestic  relations,  and 
thereby  maintain  a  "regular  standing"  in 
the  Church  of  their  choice ;  and  yet  they  may 
be  in  effect  liars  and  thieves,  even  murderers  in 
their  employment  of  others  to  work  for  them 
and  in  their  dealings  in  what  are  called 
the  "practical  affairs  of  life."  Such  men 
are  not  religious  and  ought  not  to  be  toler- 
ated in  churches  merely  because  they  are 
rich  and  liberal  contributors  to  the  "cause 
of  religion"  or  philanthropy.  They  cannot 


304  Honest    Business 

buy  their  way  into  the  kingdom  of  Heaven, 
and  they  should  not  be  permitted  to  buy  a 
good  opinion  to  which  their  character  and 
conduct  do  not  entitle  them.  That  is 
bribery  and  corruption.  It  is  "graft"  in  the 
name  of  sanctity. 

The  contention  here  is  that  it  is  the  highest 
purpose  of  religion  and  the  highest  duty  of 
churches,  as  of  schools,  to  inculcate  moral 
principles,  sound  ethics,  and  to  insist  upon 
their  application  in  labour,  in  trade,  in  all 
industrial,  commercial,  and  financial  relations. 
Then  shall  we  have  sounder  economics,  a 
more  just  distribution  of  the  fruits  of  human 
effort,  a  larger  prosperity,  and  a  higher  wel- 
fare of  the  people.  Economics,  as  it  has  long 
been  taught,  is  a  doctrine  of  selfishness. 
Religion,  at  least  the  Christian  religion,  rests 
upon  a  fundamental  doctrine  of  unselfishness, 
of  doing  unto  others  as  we  would  have  others 
do  unto  us,  of  helping  and  not  hindering  the 
weaker,  of  striving  to  raise  all  humanity  to  a 
higher  plane  and  to  make  life  better.  Hu- 
man progress,  like  development  in  the  physi- 
cal world,  is  in  a  proper  sense  a  process  of 
evolution,  but  there  is  a  factor  in  the  life 
of  man  which  does  not  exist  in  the  world  of 
matter  or  in  any  other  form  of  life.  There  is 


EtKics    and    Religion  305 

a  spiritual  element  entering  into  its  evolution 
which  must  be  derived  from  an  infinite 
spiritual  source,  the  source  of  all  life  and  the 
inspiration  of  the  soul  of  man. 

Churches,  forms  of  faith,  and  methods  of 
worship,  have  for  their  highest  object  the  ele- 
vation, purification,  and  strengthening  of  hu- 
man character  and  conduct  in  the  struggle 
toward  a  fuller  life  and  a  more  complete  well- 
being  for  all.  If  they  fail  in  that,  they  are 
barren  of  fruit  in  this  world  or  any  world  for 
which  men  may  be  destined.  Economics,  to 
contribute  to  the  real  welfare  of  people  and  to 
a  sound  and  enduring  wealth  of  nations,  must 
be  guided  by  the  true  principles  of  ethics. 
Religion,  to  be  a  vital  force  for  salvation 
from  corruption,  degradation  and  disaster  for 
peoples  and  nations,  must  have  for  its  end 
and  aim  the  widest  knowledge,  the  deepest 
thought,  the  soundest  reason,  as  a  guide  and 
support  to  moral  conduct  in  all  the  relations 
of  life.  The  ministry  of  churches  and  temples 
must  not  be  confined  to  social  and  domestic 
duties  but  must  extend  to  the  constant  inculca- 
tion of  truth,  honesty,  justice,  and  sincerity 
in  industry,  trade,  and  all  the  activities_ojL 
men's  business  in  this  world.  That  will  be 
the  best  insurance  of  safety  in  any  other  world. 


XXII 

COST   AND   VALUE    OF   LIVING 

"  TN  the  sweat  of  thy  face  shalt  thou  eat 
1  bread"  is  not  a  "primal  curse"  of  hu- 
manity, but  it  is  a  figurative  expression  of  the 
necessity  of  the  race,  as  it  has  evolved  and 
advanced  on  the  earth.  Man  must  eat  to  live 
and  to  eat  he  must  work.  The  earth  is  his 
and  the  fulness  thereof.  Out  of  it  he  must 
make  his  living  and  upon  it  he  must  live  while 
physical  life  endures.  Whatever  his  pro- 
blems for  a  life  beyond,  it  is  here  that  he  is 
set  to  work  them  out,  and  the  key  to  them  is 
concealed  in  the  simple  problem  of  living  right 
in  the  surroundings  in  which  he  finds  him- 
self. Making  the  best  of  the  present  is  the 
policy  of  insurance  for  the  safety  of  the 
future. 

In  the  complexity  of  modern  life  and  the 
relations  of  men,  much  is  said  about  the  cost 
of  living  and  the  standard  of  living.     Some- 
thing is  said  about  the  value  of  life,  because 
306 


Cost  and  "Valxie  of  Living      307 

lives  are  a  necessary  factor  in  producing 
the  means  of  living,  not  only  for  those  to 
whom  the  lives  belong,  but  for  the  com- 
munity in  which  they  are  placed.  Little 
is  said  about  the  value  of  life  to  the  individual 
who  is  living  it.  What  do  we  mean  by  the 
cost  of  living  and  what  makes  it  higher  or 
lower  at  one  time  than  another?  We  are 
given  to  calculating  cost  in  figures  which 
denote  the  prices  we  pay  for  the  things 
whereby  we  live,  and  reckoning  in  figures  the 
income  we  receive  for  helping  to  produce 
them,  which  enables  each  to  obtain  a  share 
in  the  distribution.  What  really  matters 
is  not  the  figures  or  the  number  of  dollars 
that  they  denote,  but  the  quantity,  quality, 
and  variety  of  the  things  produced,  their 
fitness  to  meet  the  real  needs  of  life  and  the 
part  each  is  able  to  obtain  in  the  distribu- 
tion. Money  is  useful  only  in  effecting  trans- 
fers and  exchanges,  and  figures  are  useful 
only  for  reckoning  and  apportionment.  Their 
being  high  or  low  has  only  a  relative  signifi- 
cance. What  is  absolutely  significant  is  pleni- 
tude of  the  things  that  minister  to  real  wants 
and  equity  in  apportioning  them  when  pro- 
duced. 

In  a  primitive  state  of  society  wants  are 


308  Honest    Business 

few  and  are  satisfied  by  small  production 
from  the  resources  of  the  earth  with  little 
labour,  varying  with  soil,  climate,  and 
other  conditions  according  to  location  on 
the  globe.  The  natural  tendency  of  human 
nature  is  to  subsist  with  the  least  effort  for 
satisfying  wants  which  are  really  felt.  With 
progress  the  resources  of  the  earth  are  not 
increased.  They  are  only  developed.  But 
wants  increase  and  multiply  and  incite 
to  greater  effort.  The  greatest  incentive 
to  the  progress  of  the  race  is  increasing 
wants,  the  desire  for  more  of  what  can  be 
obtained  only  with  labour.  It  is  this  which 
stimulates  endeavour,  makes  men  work, 
arouses  emulation  and  rivalry,  creates  com- 
petition, begets  ingenuity  and  enterprise, 
stirs  ambition,  and  urges  men  onward,  and 
in  the  main  upward,  in  the  scale  of  being. 
Ever  wanting  more  and  better  is  the  spur  to 
human  endeavour,  advancement,  and  eleva- 
tion. Its  motive  is  selfish  but  its  result 
is  beneficent.  The  greatest  need  is  to  purify 
the  motive  and  transmute  the  selfishness. 
In  the  early  stages  men  strive  to  get  all 
they  can  for  themselves  with  the  least  effort 
of  their  own,  and  are  willing  to  seize  what 
others  produce  so  far  as  they  can  safely  do  so. 


Cost  and  Valvae  of  Living      309 

Those  who  care  for  little  are  compelled  to 
work  for  others  even  when  they  would  not 
work  for  themselves.  A  state  of  slavery  or 
forced  labour  seems  to  be  necessary  to  get 
production  done  on  a  sufficient  scale  for 
progress.  It  is  the  strong  and  active  who 
compel  it  to  be  done  and  they  arrogate  to 
themselves  the  fruits,  to  be  applied  to  the 
satisfaction  of  their  desires,  whether  for  lux- 
ury, for  accumulated  wealth,  or  for  power 
over  their  fellow  beings.  There  was  a  time 
when  even  slavery  was  a  means  of  progress, 
and  the  world  is  not  wholly  free  from  it 
yet.  The  history  of  civilisation  is  a  record 
of  advancement  from  a  condition  in  which  the 
few  were  masters  and  owners  and  the  many 
slaves  and  dependents,  toward  a  state  of 
equality  that  is  yet  far  off,  is  in  fact  unattain- 
able in  this  world.  All  that  is  to  be  hoped 
for  is  a  state  of  freedom  of  opportunity,  an 
equal  chance,  with  results  that  are  equitable, 
not  equal. 

After  ages  of  progress  with  unequal  steps 
we  have  reached  the  stage  which  exists  to-day, 
still  widely  varying  in  different  parts  of  the 
world.  In  the  countries  most  highly  de- 
veloped in  production  and  trade  there  are  vast 
and  varied  agencies  and  instrumentalities  of 


3io  Honest    Business 

industry,  commerce,  and  finance,  great  accu- 
mulations of  wealth  and  diversity  of  economic 
social  and  political  conditions.  It  is  a  highly 
complex  situation  which  we  have  to  study  and 
seek  to  improve  for  the  better  progress  of 
humanity  in  the  future.  The  means  of  living 
for  all  is  greater  than  ever  before.  The 
standard  of  living  on  the  average  is  higher. 
The  "cost  of  living"  is  greater  because  the 
standard  is  higher,  and  the  unrest  and  dis- 
satisfaction certainly  is  not  less.  Is  life 
less  worth  living,  or  is  living  worth  more  to 
man  for  the  purpose  for  which  he  exists  on  the 
earth  ? 

The  "higher  cost  of  living"  in  these  days  is 
attributed  in  various  degrees  to  different 
causes.  What  is  commonly  meant  by  it  is 
the  higher  prices  paid  in  money  for  the  means 
of  living.  What  it  really  signifies,  if  the  actual 
cost  is  higher,  is  that  it  requires  more  effort  in 
labour  of  one  kind  and  another  to  obtain  the 
means  of  living.  There  are  many  fluctua- 
tions in  prices  and  in  incomes  and  there  are 
variations  less  frequent  and  less  perceptible 
in  actual  cost.  The  two  are  seldom  clearly 
distinguished.  Prices  vary  constantly  for 
the  different  things  which  contribute  to  liv- 
ing, according  to  variations  in  the  supply  and 


Cost  and  Valxie  of  Living      311 

demand  for  them,  and  this  especially  affects 
those  things  which  are  grown  from  the  soil, 
and  for  the  most  part  afford  food  and  cloth- 
ing. They  vary  with  the  seasons  and  other 
changing  conditions.  Prices  rise  when  the 
products  of  labour  are  scarce  and  fall  when 
they  are  plentiful.  They  rise  if  the  demand 
for  them  in  proportion  to  supply  increases  and 
fall  if  it  diminishes. 

Variation  in  supply  and  demand  affects 
things  prepared  by  mechanical  process  as 
well  as  those  produced  by  natural  growth 
or  cultivation  of  the  soil,  but  in  a  less 
degree  because  their  production  can  be  to 
a  greater  extent  increased  by  added  ef- 
fort or  diminished  by  relaxed  effort.  These 
are  the  commonplaces  of  economics.  They 
explain  variations  in  prices  rather  than 
changes  in  the  cost  of  living.  They  have  a 
certain  relation  to  incomes  in  various  occu- 
pations, but  do  not  affect  them  so  promptly 
or  so  much  as  they  affect  prices.  They  have 
little  to  do  with  any  lasting  advance  or  decline 
in  the  general  cost  of  subsistence  measured  by 
the  effort  required  to  secure  the  means. 

Much  is  attributed  by  some  to  variations 
in  the  "purchasing  power  of  money,"  but 
that  is  a  delusive  phrase.  Money  is  only  a 


312  Honest    Business 

means  of  effecting  the  exchange  of  other 
things,  of  measuring  them  out  in  the  dis- 
tribution, and  reckoning  the  values  to  be 
exchanged.  It  does  not  increase  or  diminish 
the  quantity  produced,  exchanged,  consumed, 
or  accumulated,  except  by  facilitating  and 
expediting  trade.  To  serve  its  purpose 
effectually  its  unit  of  measure  and  reckoning 
must  be  based  upon  a  definite  value  and  that 
should  be  as  unchanging  as  possible.  As  we 
have  seen,  of  all  products  of  nature  the  metal 
gold  serves  this  purpose  best.  It  has  been  in 
use  for  ages  and  still  serves  the  purpose  better 
than  anything  that  can  be  substituted  for  it. 
It  may  be  represented  in  the  actual  pro- 
cesses of  trade  by  substitutes  redeemable  at 
any  time  in  it,  but  they  must  be  so  redeemable 
and  must  be  redeemed  on  demand  or  they  lose 
their  utility.  Variations  in  the  volume  of 
these  will  not  change  its  value.  It  may  be 
the  basis  of  credit  whereby  a  vast  volume  of 
the  exchange  and  distribution  of  products  is 
effected  without  the  direct  use  of  money  save 
to  "settle  balances."  Neither  does  the 
varying  of  this  volume  change  its  value,  but 
the  quantity  needed  as  the  basis  of  other 
"currency,"  including  instruments  of  credit, 
varies  with  the  burden  it  must  carry  if  the 


Cost  and  Value  of  Living      313 

operations  of  business  are  to  go  on  with  safety, 
for  the  solid  basis  of  the  whole  structure  is 
the  only  real  money,  gold. 

Do  changes  in  the  actual  value  of  this 
universal  money  metal  account  for  changes  in 
the  cost  of  living?  There  are  authorities  who 
say  that  it  is  the  chief  cause,  but  the  better 
opinion  is  that  it  is  the  least  tangible  among 
causes.  It  has  the  least  effect,  and  such  as 
it  is  there  is  no  way  of  remedying  it  unless 
some  material  can  be  found  equally  available 
and  of  greater  stability.  There  is  nothing  of 
the  kind  in  sight,  and  the  real  variation  in 
gold  and  the  effect  therefrom  is  so  uncertain 
and  in  any  case  so  slight  that  the  search  is  not 
worth  while. 

There  is  no  doubt  that  the  world's  supply 
of  gold  has  greatly  increased  from  time  to 
time  by  the  discovery  of  deposits  unknown  or 
unproductive  before,  and  by  improved  pro- 
cesses of  obtaining  it  in  its  purity.  On  the 
whole,  prices  have  risen  with  its  greatly 
increased  production.  In  recent  years  the 
annual  addition  to  the  supply  has  been  much 
larger  than  ever  before.  The  supply  already 
existing  is  not  replaced,  as  in  many  other 
things.  It  wastes  and  disappears  or  is  actu- 
ally "consumed"  but  slowly,  and  the  yearly 


314  Honest    Business 

production  adds  to  the  accumulation.  No 
doubt  this  increasing  volume,  whether  from 
newly  discovered  or  newly  developed  deposits 
or  cheapening  processes  of  production,  tends 
to  depreciate  the  value  of  the  metal,  in  its 
relation  to  other  things  for  which  it  is  ex- 
changed and  which  it  serves  as  a  means  of 
exchanging.  We  say  "tends, "  for  how  far  it 
has  that  effect  is  uncertain  on  account  of 
many  counteracting  influences.  Its  use 
makes  it  exceptional  in  its  relation  to  the 
law  of  supply  and  demand. 

Its  use  is  universal  among  civilised  man- 
kind, and  the  desire  for  it,  which  constitutes 
demand,  is  without  limit,  even  among  those 
not  civilised.  As  fast  as  it  is  produced  it  is 
diffused  through  spreading  channels  through- 
out the  world.  As  supply  increases,  more 
and  more  is  used  in  useful  arts  and  for  de- 
coration and  ornament.  More  and  more  is 
devoted  to  luxurious  or  ostentatious  display. 
More  and  more  goes  into  barbaric  hoards. 
The  proportion  of  the  entire  supply  used  as 
the  universal  medium  of  exchange  perhaps 
does  not  increase,  and  possibly  diminishes, 
though  the  absolute  quantity  devoted  to  that 
use  undoubtedly  does  increase.  This  is 
the  only  part  of  the  supply  of  which  there  is 


Cost  and  Value  of  Living      315 

statistical  record.  But  the  demand  for  that 
use  also  increases  and  it  is  not  at  all  certain 
that  in  these  years  of  advancing  prices  and 
relatively  advancing  costs  it  has  failed  to 
keep  pace  with  the  increased  supply.  Gold 
is  much  more  largely  used  as  the  basis  of 
national  currencies  than  formerly.  Credit 
operations  have  been  vastly  extended,  requir- 
ing a  constant  broadening  and  deepening  of 
their  basis  to  make  them  secure. 

It  may  be  that  relative  depreciation  of  gold 
has  something  to  do  with  the  rise  in  the 
general  level  of  prices  and  the  advance  in  the 
"cost  of  living,"  so  far  as  the  apparent 
advance  is  real.  If  so,  it  cannot  be  helped; 
but  there  are  so  many  other  factors  more 
tangible  and  more  potent  that  it  is  not  worth 
while  to  lay  stress  upon  this,  or  to  resort  to 
futile  expedients  for  battling  with  the  un- 
known. Some  of  the  causes  of  increased  cost 
that  are  clearly  perceptible  are  not  permanent 
in  their  effect,  though  there  may  be  a  suc- 
cession of  them.  There  has  been  a  pro- 
longed period  of  exploitation  and  promotion, 
using  up  vast  amounts  of  capital  in  under- 
takings from  which  the  return  in  fruits  of 
increased  production  are  long  deferred  and 
from  some  of  which  it  may  never  come. 


316  Honest    Business 

If  canals  are  constructed  between  oceans, 
if  tunnels  are  bored  through  mountains  or 
under  rivers,  if  costly  systems  of  transporta- 
tion are  established  for  traffic  which  is  to  grow 
through  a  long  course  of  years,  if  new  regions 
are  developed,  taking  time  to  bring  results, 
and  huge  constructions  and  improvements 
are  going  on  through  private  and  public  enter- 
prise, while  at  the  same  time  governments  are 
squandering  substance  upon  armaments  and 
squadrons,  upon  pensions  and  other  extrava- 
gances, and  mortgaging  the  future  of  their 
subjects  with  heavy  debts,  untold  amounts 
of  capital  are  being  absorbed  and  diverted 
from  that  production  which  ministers  to 
the  continual  wants  of  the  people.  Great 
masses  of  the  supplies  produced  go  into  these 
"works"  out  of  which  nothing  comes,  and 
that  detracts  vastly  from  what  remains  for 
the  support  of  those  who  are  all  the  while 
producing  the  supplies  which  pour  into  those 
voracious  chasms.  Some  day  some  of  them 
may  turn  into  means  of  production  or  agen- 
cies for  increasing  production,  and  send  back 
something  for  the  support  or  enrichment  of 
mankind.  Meanwhile  they  are  draining 
away  labour  and  the  products  of  labour  to 
such  an  extent  as  to  affect  materially  what 


Cost  and  Value  of  Living      317 

remains  for  the  general  distribution.  This 
raises  the  level  of  prices  for  many  things 
and  increases  the  cost  of  living  for  whole 
populations. 

There  is  another  cause,  in  the  belief  of  this 
writer  most  potent  of  all,  but  apparently 
little  regarded  in  general  discussions  of  the 
subject.  That  is  the  great  accumulation  of 
wealth  in  recent  times  in  the  hands  of  a  com- 
paratively small  proportion  of  the  people,  and 
the  enormous  squandering  and  waste  of  the 
common  substance  that  goes  on  in  what  is 
called  "high  living,"  but  is  in  many  cases 
far  from  exalted  in  its  "standard."  These 
favoured  and  pampered  persons  do  not  feel 
the  cost  of  living.  It  is  felt  by  those  of 
moderate  means  in  the  necessity  of  denying 
themselves  many  things  which  would  give 
them  rational  satisfaction  and  minister  to 
the  higher  wants  of  their  nature.  It  is  felt 
severely  by  "toiling  masses"  of  people  who 
suffer  actual  discomfort  and  privation  for 
lack  of  what  they  really  need.  There  is  no 
maximum  or  minimum  limit  to  human 
wants,  no  fixed  standard  of  living. 

We  cannot  too  often  remind  ourselves  that 
something  is  never  made  from  nothing;  no- 
thing is  consumed  that  has  not  been  pro- 


3i8  Honest    Business 

duced;  nothing  is  spent  by  any  that  has  not 
been  earned  by  some.  If  an  undue  portion 
goes  into  the  hands  of  a  few,  an  insufficient 
portion  is  distributed  to  the  many.  Thus 
the  most  potent  cause  of  the  high  cost  of  liv- 
ing in  these  latter  days  is  the  enormous 
squandering  and  waste  of  the  common  sub- 
stance produced  by  labour  in  the  high  living 
and  the  swollen  accumulations  of  the  wealthy 
few.  It  diverts  a  vast  proportion  of  labour 
and  of  the  instrumentalities  used  to  increase 
the  efficiency  of  labour  to  the  production  of 
articles  of  luxury,  many  of  which  are  not 
merely  superfluous,  ministering  to  no  ra- 
tional need  of  human  life,  but  are  absolutely 
pernicious.  We  do  not  include  among  these 
anything  that  appeals  to  the  higher  senti- 
ments or  emotions,  as  things  of  beauty,  or 
anything  that  ministers  to  wholesome  pleasure 
or  enjoyment. 

Those  who  have  the  means  honourably 
acquired  through  superior  ability  or  good 
fortune  are  entitled  to  gratify  their  tastes  for 
the  elegant,  the  beautiful,  the  graceful,  and 
the  comfortable  in  life.  They  may  be 
entitled  to  fare  sumptuously  every  day,  if  it  is 
done  with  due  regard  for  their  own  health 
and  character,  and  the  degree  of  comfort  to 


Cost  and  Valxie  of  Living      319 

which  others  are  entitled.  But  much  is\ 
squandered  in  ostentatious  display  which 
is  reckless  and  vulgar,  which  demoral- 
ises and  degrades  instead  of  elevating  and 
refining,  and  which  springs  from  over- weening 
greed  and  gross  selfishness.  It  may  ex- 
cite envy,  but  it  does  not  inspire  admira- 
tion, or  respect.  There  may  be  a  low  kind 
of  gratification  in  indulging  in  this  sort  of 
vanity,  but  it  leads  to  isolation  from  the 
sympathy  of  fellowmen.  There  would  be 
more  real  satisfaction  in  using  wealth  in 
a  way  that  would  benefit  the  community  in 
which  one  lives  and  win  the  approbation  of 
those  with  whom  one  lives. 

We  have  already  dwelt  sufficiently  upon 
the  cost  to  others  of  the  extravagance  and 
waste  of  many  of  those  who  have  gathered 
to  themselves  more  wealth  than  they  are 
entitled  to,  or  is  good  either  for  themselves 
or  anybody  else.  But  we  may  repeat  that 
if  the  labour  bestowed  upon  their  super- 
fluities and  in  repairing  their  ravages  were 
employed  in  a  more  abundant  production  of 
those  things  which  minister  to  the  necessities, 
the  needs,  the  wants,  the  comforts,  and  the 
rational  enjoyment  of  human  life,  these  would 
be  far  more  plentiful  and  more  widely  and 


Honest    Business 

equitably  distributed.  Their  cost  would  be 
less  and  those  engaged  in  producing  them 
would  get  a  more  liberal  share  of  the  fruits  of 
their  effort.  Prices  of  products  and  wages  of 
labour  in  producing  them  would  be  lower  in 
figures,  but  real  values  would  not  be  less. 
The  main  thing  is  that  in  the  distribution 
the  shares  of  those  who  contributed  to  the 
production  of  those  "goods"  which  are 
really  necessary  or  useful  would  be  materially 
greater  and  more  liberally  and  equitably 
apportioned.  The  real  "cost  of  living" 
would  be  materially  lowered.  The  general 
standard  of  living  would  be  substantially 
raised,  and  the  extremes  above  and  below 
the  average  level  would  not  be  nearly  so  far 
apart. 

The  production  of  wealth  would  not  be  less 
but  its  forms  would  be  different.  The 
saving  and  accumulation  would  be  greater  as 
well  as  much  more  evenly  distributed.  The 
surplus  above  all  reasonable  needs  and  above 
actual  consumption  would  be  larger  and  more 
generally  applied  for  the  benefit  of  the  com- 
munity in  which  it  was  acquired,  for  the 
healthy  growth  of  the  nation  in  which  it  was 
produced,  and  for  the  progress  of  mankind. 
The  wish  to  squander  wealth  in  wasteful  and 


Cost  and  Value  of  Living      321 

extravagant  ways  for  the  gratification  of  sel- 
fish desires  of  the  baser  sort  is  one  of  the 
strongest  incentives  for  acquiring  wealth  by 
unfair  and  unjust  means.  There  is  nothing 
ignoble  in  the  desire  to  gain  wealth.  There 
are  many  noble  purposes  that  may  be  served 
by  it  with  the  highest  satisfaction  to  the 
possessor.  The  capacity  to  acquire  wealth 
is  no  mean  endowment,  though  it  is  far  from 
being  the  highest  bestowed  upon  men.  It 
may  be  honourably  and  beneficently  exer- 
cised. It  is  a  power  which  grows  with 
acquisition  and  which  gives  control  over 
great  forces  for  good  or  for  evil.  Like  all 
power  in  human  hands  it  carries  with  it 
corresponding  responsibility.  That  power 
always  has  been  and  still  is  grossly  abused, 
and  that  is  the  chief  cause  of  the  "social 
unrest"  of  which  so  much  has  been  heard  in 
recent  years.  This  comes  from  a  sense  of 
wrong  which  is  not  fully  understood  by  those 
who  feel  it.  Most  of  those  who  exercise  the 
power  which  the  possession  of  wealth  imparts, 
use  it  in  arrogating  to  themselves  in  the  pro- 
cesses of  production  far  more  than  their  share 
of  the  fruits.  They  use  it  also  in  squandering 
and  wasting  a  large  portion  of  that  which 
rightly  belongs  to  others. 


322  Honest    Business 

If  this  could  be  corrected  and  the  rule  of 
reason  and  of  justice  and  equity  could  be 
made  to  prevail  in  the  economic  and  social 
world  the  "cost  of  living"  would  be  much 
less,  the  "standard  of  living"  for  the  great 
mass  of  the  world's  workers  would  be  much 
higher,  and  the  value  of  living  would  be 
greater  for  all.  The  wealth  of  nations  would 
be  greater  and  the  welfare  of  people  would  be 
vastly  enhanced.  How  is  that  to  be  brought 
about?  Not  by  statute  law  or  by  force, 
whether  in  irresponsible  hands  or  exerted  by 
government  authority.  The  chief  value  of 
law  is  to  make  secure  that  which  the  exist- 
ing state  of  society  makes  attainable  and  to 
encourage  and  promote  its  attainment  with- 
out attempting  to  force  it.  The  chief  func- 
tion of  government  is  to  defend  and  protect 
from  assault  or  impairment  that  which 
has  been  secured  and  to  support  further 
efforts  at  progress. 

The  real  remedy  for  wrongs,  the  actual 
means  of  establishing  rights  must  be  found  in 
the  resources  of  human  character,  its  capacity 
for  development  and  its  guidance  by  sound 
principles  and  high  motives,  and  that  is  a 
matter  of  education  and  discipline  of  the 
moral  faculties  of  mankind,  which  should 


Cost  and  Value  of  Living      323 

begin  with  the  earliest  years  of  childhood  and 
be  carried  to  the  last  days  of  life.  It  is  the 
work  of  families,  of  schools,  of  churches,  of 
all  the  intellectual,  moral,  and  religious 
forces  of  human  society,  and  not  of  legis- 
latures or  rulers,  which  are  merely  the  agents 
for  accomplishing  what  society  demands. 
They  are  not  masters  but  servants,  and  can 
only  do  as  they  are  bid  and  go  as  far  as  they 
have  support. 

Herein  is  to  be  found  the  means  to  a  higher 
standard  of  living  for  both  rich  and  poor. 
There  is  a  way  for  making  life  better  worth 
living,  of  greater  value  to  the  individual  all 
along  the  scale  and  to  the  organic  whole,  eco- 
nomic, social,  and  political.  Let  those  who 
work  for  hire  be  better  taught  and  guided,  but 
let  them  organise,  consult,  make  their  de- 
mands, and  plead  their  cause.  It  is  a  means 
of  education  for  them,  in  which  they  should 
have  sympathy,  encouragement,  and  aid,  as 
well  as  counsels  of  restraint  and  reason.  Let 
those  who  control  capital  and  employ  labour 
consider  their  duties  and  responsibilities  to 
those  employed  and  to  the  society  in  which 
they  live  and  not  use  their  advantage  of 
position  solely  for  their  own  profit  and 
aggrandisement.  Let  them  consider  the  wel- 


324  Honest    Business 

fare  of  those  who  do  the  work  and  of  the 
community  of  which  they  are  a  part,  and 
seek  to  do  justice  and  equity  in  their  rela- 
ions  with  all  their  fellowmen.  They  may  not 
get  so  rich  individually,  but  what  they 
acquire  will  be  theirs  by  a  higher  right,  and 
they  will  get  more  satisfaction  from  it.  None 
may  get  enormously  rich,  but  a  far  larger 
number  will  get  substantially  rich,  and  practi- 
cally everybody  who  is  not  worthless  will  be 
"well  off."  The  number  of  the  worthless 
will  grow  less;  the  criminal  can  be  made  to 
disappear,  and  the  unfortunate  can  be  fully 
cared  for,  according  to  their  needs  and  their 
deserts.  Life  will  be  of  more  value  to  all, 
individually  and  collectively.  It  will  be 
worth  more  in  real  satisfaction  to  the  rich  as 
well  as  to  the  poor,  and  there  will  be  no  desti- 
tute. The  road  of  human  progress  is  long 
and  toilsome.  It  cannot  be  traversed  in  a 
day,  a  generation,  or  a  millennium;  but  the 
pace  can  be  accelerated  by  the  united  efforts 
of  the  gathering  forces  of  progress.  A  reign 
of  righteousness  in  the  economic  world  would 
vastly  increase  the  wealth  of  nations  which 
would  speedily  blend  with  the  welfare  of 
people. 


XXIII 

THE  BEST  POLICY 

THE  conclusion  of  the  whole  matter  is  that 
honesty,  square  dealing,  good  faith,  is 
best  as  a  business  policy.  It  is  not  merely  a 
moral  virtue,  good  for  the  soul  or  necessary 
to  salvation,  and  sustained  by  the  sanctions 
of  religion  or  social  custom.  It  is  not  simply 
an  ethical  principle,  essential  to  sound  char- 
acter and  good  repute  in  personal  relations, 
and  necessary  to  the  cohesion  of  well-ordered 
society.  It  is  a  pervasive  economic  principle, 
the  basis  of  confidence,  which  is  the  found- 
ation of  prosperity  and  material  success. 
In  the  intimate  relations  of  men  in  their 
personal  dealings,  lying,  deceit,  and  sharp 
practice  may  win  a  delusive  and  short-lived 
success.  With  unusual  shrewdness  and  skill 
dishonesty  may  in  a  few  cases  amass  wealth 
and  purchase  forbearance  for  a  time,  but  it 
can  only  work  harm  to  the  community,  and 
the  results  are  never  worth  what  they  cost 
325 


326  Honest    Business 

to  the  possessor.  For  him  it  will  forfeit 
the  "purest  treasure  mortal  times  afford," 
"spotless  reputation,"  which  cannot  be 
bought  with  money.  In  its  individual  aspect 
it  comes  so  closely  home  to  the  common  life 
that  it  is  in  the  main  rightly  judged  and 
suffers  the  penalty  of  discredit,  disrepute,  and 
failure  to  bring  anticipated  satisfaction.  It 
can  never  bring  true  happiness  or  unalloyed 
comfort,  which  may  be  found  even  in  honest 
poverty.  But  in  large  affairs  in  which  men 
act  in  organised  bodies  and  have  dealings 
which  do  not  involve  direct  personal  rela- 
tions, the  standard  of  business  conduct  is  still 
one  of  semi-barbarism,  savouring  of  the  primi- 
tive instinct  for  plunder.  There  is  planning 
and  scheming  in  which  the  sense  of  honour  has 
no  part.  There  is  a  ruthless  exercise  of  power 
to  gain  advantage,  and  out  of  enlarged  pro- 
duction to  extort  an  undue  share  of  the  pro- 
ceeds at  the  expense  of  those  who  are  unable 
to  hold  their  own  in  the  struggle. 

We  have  already  dwelt  upon  the  moral 
aspect  of  this,  the  wrong  and  injustice,  the 
personal  guilt  and  responsibility  which  seek 
to  hide  behind  intrenched  organisation. 
What  we  are  now  considering  is  the  cold 
economic  aspect,  the  sheer  material  loss  or 


TKe  Best  Policy  327 

gain.  Practically  all  the  trouble  between 
labour  and  capital,  between  organised  and 
unorganised  labour  or  organised  and  un- 
organised capital,  between  organisations  of 
either  or  between  combinations  and  govern- 
ment representing  the  public,  is  due  to  lack 
of  honesty,  of  the  sense  of  right  and  willing- 
ness to  be  ruled  by  it,  on  one  side  or  the  other 
or  both.  Such  trouble  is  the  cause  of  im- 
mense waste  and  loss,  of  increased  cost  of 
production  and  diminished  results. 

The  organisation  of  men  with  capital  and 
the  organisation  of  men  with  skill  and  in- 
dustry and  the  co-operation  of  these  organ- 
ised forces  can  be  made  to  increase  greatly  the 
output  of  human  effort  applied  to  the  re- 
sources of  nature.  If  men  of  ability  and 
integrity  directing  such  organisation  on  both 
sides  would  get  together  in  conference  in  a 
spirit  of  fairness,  with  a  desire  to  do  what  is 
right  and  to  promote  the  common  good, 
instead  of  each  party  trying  to  get  all  it  can 
at  the  expense  of  the  other,  the  net  result 
would  be  a  larger  prosperity,  greater  ease  and 
comfort,  and  rapid  advancement  toward  the 
ideal  state.  There  would  be  undisturbed 
system  with  steady  and  peaceable  work. 
With  shorter  hours  there  would  be  larger 


328  Honest    Business 

output,  with  a  fair  distribution  there  would 
be  greater  general  wealth  more  equitably 
diffused.  There  would  be  no  strikes  or  lock- 
outs to  interrupt  production  and  income 
while  expense  and  consumption  went  on. 
There  would  be  no  destruction  by  acts  of 
violence  or  recklessness,  no  loss  or  waste 
from  resentment  and  neglect,  or  from  refusal 
to  pursue  the  most  efficient  and  economical 
methods. 

There  would  have  to  be  an  intelligent 
recognition  on  the  part  of  those  who  furnished 
capital  and  those  who  supplied  labour,  of  their 
dependence  upon  each  other  and  of  their 
mutual  rights  and  interests,  and  a  willingness 
on  the  part  of  each  to  accord  to  the  other 
what  it  is  entitled  to  as  a  reward  for  its  part 
in  the  world's  work.  Labour  would  have  to 
admit  the  vast  value  of  capital  in  enabling  it 
to  accomplish  so  much,  and  the  necessity,  in 
order  to  give  it  full  effect,  of  the  ability  and 
training  of  those  who  supply  it  and  direct  its 
application.  It  would  have  to  grant  the  right 
to  a  commensurate  reward,  for  the  benefit 
does  not  accrue  alone  to  those  who  furnish  the 
capital  and  direct  its  effective  use,  but  the 
fruits  are  shared  by  all  who  have  a  part  in 
the  work  it  helps  to  do. 


XKe  Best  Policy  329 

On  the  other  hand,  capital  would  have  to 
admit  that  it  has  no  power  to  accomplish 
results  without  labour,  and  that  it  is  better 
for  labour  to  become  an  organised  force 
under  effective  direction,  in  a  position  to  bar- 
gain for  itself  and  assume  obligations,  than  to 
be  a  mob  or  rabble  of  individuals  pushing 
for  employment  and  dependent  upon  daily 
work  for  a  living.  It  would  have  to  be  ac- 
knowledged that  those  who  perform  the  la- 
bour are  entitled  to  a  share  in  the  proceeds 
commensurate  with  their  contribution  in  pro- 
ducing results,  not  simply  what  they  need  in 
order  to  meet  wants  gauged  by  somebody 
else,  or  what  is  necessary  to  induce  them  to 
work  as  an  alternative  to  going  without  the 
means  of  subsistence.  The  sound  maxim  for 
rewarding  labour  is  not  that  socialistic 
formula  "to  each  according  to  his  needs," 
but  to  each  according  to  his  part  in  producing 
that  which  is  to  be  divided. 

It  may  not  be  easy  to  determine  the  equi- 
table share  of  all  who  supply  capital  and 
manage  its  application  and  all  who  take  part 
in  the  work  of  production  and  the  distribu- 
tion of  products.  It  requires  intelligence  as 
well  as  a  sense  of  justice,  and  with  human 
nature  so  prone  to  selfishness  and  one-sided 


33°  Honest    Business 

vision,  it  needs  in  case  of  difference  or  dispute 
an  impartial  tribunal  upon  which  both  sides 
to  the  partnership  of  capital  and  labour  are 
represented,  to  fix  the  terms  of  apportion- 
ment. In  the  ideal  economic  state  toward 
which  we  are  supposed  to  be  striving,  the 
employer  would  not  say  from  his  position  of 
advantage  and  power  that  he  would  pay  so 
much  and  no  more,  regardless  of  right;  and 
the  workmen  would  not  say  they  must  have 
so  much  and  no  less,  and  try  by  united  force 
to  extort  it  regardless  of  justice.  There 
would  be  collective  negotiating  and  bar- 
gaining with  binding  contracts  based  upon 
equity,  with  every  effort  to  do  and  to  secure 
what  is  right;  and  there  would  be  means  of 
executing  the  terms  of  all  agreements.  There 
would  also  be  willingness  to  modify  terms 
with  changes  of  conditions.  Wages  as  well  as 
profits  should  go  up  when  conditions  favour 
it,  and  wages  as  well  as  profits  should  come 
down  when  conditions  require  it;  but  with 
the  principle  of  honest  endeavour  in  opera- 
tion there  would  be  fewer  and  narrower 
fluctuations. 

This  is  presented,  not  as  immediately 
attainable,  but  as  embodying  the  funda- 
mental principle  of  fair  dealing  which  must 


THe  Best  Policy  331 

prevail  if  human  welfare  is  to  advance. 
Human  nature  cannot  be  transformed  at  once 
and  the  ideal  cannot  be  reached  at  a  bound. 
But  in  the  complex  nature  of  man  the  intui- 
tion of  honesty  is  implanted,  and  it  is  an 
essential  factor  in  our  business  problems. 
Persistently  applied  it  would  be  a  solvent 
of  all  difficulty.  It  must  pervade  all  industry 
and  trade.  It  is  especially  required  in  the 
conduct  of  large  operations  through  power- 
ful organisation.  More  than  all  it  is  needed 
in  that  general  business  of  the  people  called 
government,  which  has  a  relation  to  all  their 
industry  and  trade  and  to  their  safety  and 
well-being.  Its  absence  there  works  most 
harm  and  its  presence  is  most  essential  to 
the  general  well-being.  Yet  there  it  is  apt  to 
be  lacking  quite  as  much  as  in  any  other 
business  of  national  life. 

How  then  are  we  to  work  toward  this  ideal 
of  honest  business,  as  best  for  the  individual, 
rich  or  poor,  strong  or  weak,  best  for  the 
communities  in  which  men  live  together,  and 
best  for  the  nation  in  its  relation  to  its  own 
citizens  and  its  relation  to  other  nations,— 
best  as  a  matter  of  policy?  For  the  living 
generation  it  is  a  question  of  education,  of 
nurture  and  training.  So  far  as  it  depends 


332  Honest    Business 

upon  birth  and  heredity  each  generation 
must  improve  the  next  with  its  own  gain. 
There  is  nothing  so  important  to  teach  in  the 
family  as  truth  and  honesty,  but  in  many 
families  it  is  thoughtlessly  or  ignorantly 
neglected,  neglected  for  lack  of  appreciation 
of  its  value.  Nothing  is  so  essential  to 
teach  in  schools,  for  thousands  of  children 
enter  the  schools  from  families  where  the 
lesson  is  not  taught.  The  schools  can  exercise 
a  limitless  influence  upon  conditions  of  the 
future  to  promote  material  well-being  with- 
out which  other  well-being  will  languish  and 
decay. 

The  most  vital  lesson  to  be  taught  from  the 
pulpit  is  plain  honesty,  honesty  with  one's 
self,  honesty  in  dealing  with  others,  honesty 
to  the  state  and  nation.  It  is  of  the  essence 
of  all  righteousness  and  necessary  to  salvation 
whether  material  or  spiritual.  All  dogmas 
and  rites  and  ceremonies  of  the  church  are 
vain  repetition  and  fruitless  for  human 
salvation  except  so  far  as  they  inculcate, 
stimulate,  and  sustain  the  effort  of  humanity 
to  be  truthful  and  honest,  which  is  synony- 
mous with  being  right.  It  is  vain  to  sacrifice 
earthly  well-being  in  the  hope  of  bliss  here- 
after, if  rectitude  in  character  and  conduct 


THe  Best  Policy  333 

is  not  thereby  gained.  That  is  the  best 
insurance  for  all  life  in  any  world.  The  most 
potent  agency  for  inculcating  honesty  in 
business  is  the  printing  press,  for  it  is  busy 
every  day  and  reaches  the  millions  morning 
and  night ;  but  it  is  much  addicted  to  reflect- 
ing humanity  as  it  is  and  too  little  concerned 
with  making  it  what  it  ought  to  be.  Its 
influence  is  constant  and  powerful  for  expres- 
sion and  for  impression.  If  for  a  generation, 
education,  in  the  home,  in  the  school,  in  the 
church,  and  in  the  press,  were  directed  pri- 
marily to  making  the  human  race  honest,  it 
would  lift  it  up  and  push  it  forward  farther 
than  it  has  moved  in  a  thousand  years,  not 
only  morally,  but  mentally  and  materially. 
It  would  in  the  end  make  the  poor  and  rich 
alike  eligible  to  the  kingdom  of  heaven. 


THE   END 


A  Selection  from  the 
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The  Tariff  History  of 
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Henry  Lee  Professor  of  Economics  in  Harvard 
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